SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) June 26, 1997
TMS Auto Holdings, Inc.(as Seller) under a Sale and Servicing
Agreement dated as of May 31, 1997 in connection with the
issuance of The Money Store Auto Trust Asset Backed Securities.
TMS Auto Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware 333-14075 22-3405381
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) ID Number)
1625 West North Market Blvd., Sacramento, California 95834
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number,
including area code: (916) 928-4400
N/A
(Former name or former address, if changed since last report)
Item 5. Other Event
The Money Store, Inc., as representative (the "Representative"), and TMS
Auto Holdings, Inc. (the "Seller") registered issuances of up to $1,100,000,000
principal amount of The Money Store Auto Trust Asset Backed Securities on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Act"), by a Registration Statement on Form S-3
(Registration File No. 333-14075)(as amended, the "Registration Statement").
Pursuant to the Registration Statement, the Representative and the Seller caused
The Money Store Auto Trust 1997-2 (the "Trust") to issue $160,000,000 aggregate
principal amount of its Class A-1 6.17% Asset Backed Notes (the "Class A-1
Notes"), $60,500,000 aggregate principal amount of its Class A-2 6.495% Asset
Backed Notes (the "Class A-2 Notes" and, together with the Class A-1 Notes, the
"Notes") and $4,500,000 aggregate principal amount of its 6.64% Asset Backed
Certificates (the "Certificate," and together with the Notes, the "Securities"),
on June 26, 1997, (the "Closing Date"). This Current Report on Form 8-K is being
filed to file a detailed description of the Initial Receivables, a copy of the
Indenture, Trust Agreement and Sale and Servicing Agreement referred to below
and the Underwriting Agreement and Pricing Agreement, each dated June 19, 1997
by and among the Representative, the Seller and Smith Barney Inc.
The Notes were issued pursuant to an Indenture dated as of May 31, 1997,
between the Trust and The Chase Manhattan Bank, as Trustee and Indenture
Collateral Agent (the "Indenture"). The Trust was formed, and the Certificates
were issued, pursuant to a Trust Agreement dated as of May 31, 1997 between the
Seller and Bankers Trust (Delaware), as Owner Trustee (the "Trust Agreement").
The Initial Receivables were conveyed to the Trust pursuant to a Sale and
Servicing Agreement dated as of May 31, 1997 by and among the Seller, the
Representative, the Trust and The Money Store Auto Finance Inc. (the "Sale and
Servicing Agreement").
On the Closing Date, the Seller delivered to the Trust Initial Receivables
in the amount of $185,927,062.83. On the Closing Date, the Representative also
caused to be deposited an aggregate cash amount (the "Pre-Funded Amount") into
the Pre-Funding Account in the amount of $30,419,091.02. The Pre-Funded Amount
may be used during the Funding Period (as defined below) only (i) to acquire
Subsequent Receivables and (ii) to make accelerated payments of principal on the
Securities as described in the Indenture, Trust Agreement and Sale and Servicing
Agreement. The Funding Period is defined in the Sale and Servicing Agreement as
the period commencing on the Closing Date and terminating on the earliest of (i)
the date on which the amount on deposit in the Pre-Funding Account is less than
$200,000, (ii) a Servicer Default occurs under the Sale and Servicing Agreement
or (iii) July 20, 1997, after giving effect to the purchase of Subsequent
Receivables on such date.
Capitalized terms not defined herein have the meanings assigned in the Sale
and Servicing Agreement attached hereto as Exhibit 4.1.
Certain Characteristics
The final characteristics of the Initial Receivables are as set forth in
the Prospectus Supplement.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
Exhibit No.
1.1 Underwriting Agreement, dated June 19, 1997, among The Money Store
Inc., TMS Auto Holdings, Inc. and Smith Barney Inc.
1.2 Pricing Agreement, dated June 19, 1997, between The Money Store Inc.,
TMS Auto Holdings, Inc. and Smith Barney Inc.
4.1 Sale and Servicing Agreement, dated as of May 31, 1997, among The
Money Store Inc., TMS Auto Holdings, Inc., The Money Store Auto Finance
Inc. and The Money Store Auto Trust 1997-2.
4.2 Indenture, dated as of May 31, 1997, between The Money Store Auto
Trust 1997-1 and The Chase Manhattan Bank.
4.3 Trust Agreement, dated as of May 31, 1997, by and between TMS Auto
Holdings, Inc. and Bankers Trust (Delaware).
99.1 Form of Financial Guaranty Insurance Policy covering the Notes to be issued
by MBIA Insurance Corporation.
99.2 Form of Financial Guaranty Insurance Policy covering the Certificates to be
issued by MBIA Insurance Corporation.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TMS AUTO HOLDINGS, INC.
By: /s/ Morton Dear
----------------------
Name: Morton Dear
Title: Executive Vice President
Dated: June 26, 1997
<PAGE>
EXHIBIT INDEX
Exhibit No.
Description of Exhibit
1.1 Underwriting Agreement, dated June 19, 1997, among The Money Store
Inc., TMS Auto Holdings, Inc. and Smith Barney Inc.
1.2 Pricing Agreement, dated June 19, 1997, between The Money Store Inc.,
TMS Auto Holdings, Inc. and Smith Barney Inc.
4.1 Sale and Servicing Agreement, dated as of May 31, 1997, among The
Money Store Inc., TMS Auto Holdings, Inc., The Money Store Auto Finance
Inc. and The Money Store Auto Trust 1997-2.
4.2 Indenture, dated as of May 31, 1997, between The Money Store Auto
Trust 1997-1 and The Chase Manhattan Bank.
4.3 Trust Agreement, dated as of May 31, 1997, by and between TMS Auto
Holdings, Inc. and Bankers Trust (Delaware).
99.1 Form of Financial Guaranty Insurance Policy covering the Notes to be issued
by MBIA Insurance Corporation.
99.2 Form of Financial Guaranty Insurance Policy covering the Certificates to be
issued by MBIA Insurance Corporation.
THE MONEY STORE INC.
TMS AUTO HOLDINGS, INC.
The Money Store Auto Trust 1997-2
$160,000,000 Class A-1 6.17% Asset Backed Notes
$60,500,000 Class A-2 6.495% Asset Backed Notes
$4,500,000 6.64% Asset-Backed Certificates
UNDERWRITING AGREEMENT
June 19, 1997
SMITH BARNEY INC.
as Representative (the "Representative")
of the several Underwriters named
herein
390 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
The Money Store Inc., a New Jersey corporation ("TMSI") and TMS Auto
Holdings, Inc., a Delaware corporation (the "Seller") propose to cause THE MONEY
STORE AUTO TRUST 1997-2 (the "Trust") to issue and sell $160,000,000 principal
amount of its Class A-1 6.17% Asset Backed Notes (the "Class A-1 Notes"), and
$60,500,000 principal amount of its Class A-2 6.495% Asset Backed Notes (the
"Class A-2 Notes" and, together with the Class A-1 Notes, the "Notes") and
$4,500,000 principal amount of its 6.64% Asset Backed Certificates (the
"Certificates" and, together with the Notes, the "Securities") to the several
underwriters named in Schedule I attached hereto (the "Underwriters"). The
assets of the Trust include, among other things, a pool of non-prime receivables
generated pursuant to motor vehicle retail installment sale contracts (the
"Initial Receivables") acquired by the Seller pursuant to a purchase agreement
dated as of May 31, 1997 (the "Purchase Agreement") between the Seller and TMS
Auto Finance, Inc., all monies received under the Initial Receivables after,
with respect to each Initial Receivable, the later of (x) May 31, 1997 and (y)
the date of its origination (the "Initial Cutoff Date"), additional receivables
generated pursuant to motor vehicle retail installment sale contracts (the
"Subsequent Receivables," and together with the Initial Receivables, the
"Receivables") to be conveyed to the Trust subsequent to the date of issuance of
the Securities and all monies received under the Subsequent Receivables after
their respective subsequent cutoff dates (each, a "Subsequent Cutoff Date"), an
assignment of the security interests in the vehicles financed thereby, certain
bank accounts and the proceeds thereof, a note guaranty insurance policy issued
by MBIA Insurance Corporation (the "Insurer") to the Indenture Trustee (as
defined below) for the benefit of the Noteholders (the "Note Policy"), a
certificate guarantee insurance policy issued by the Insurer to the Owner
Trustee (as defined herein) for the benefit of the Certificateholders (the
"Certificate Policy" and, with the Note Policy, the "Policies") and certain
other property and the proceeds thereof to be conveyed to the Trust pursuant to
the Sale and Servicing Agreement to be dated as of May 31, 1997 (the "Sale and
Servicing Agreement") among the Trust, the Seller, TMSI and TMS Auto Finance
Inc., as servicer (the "Servicer"). Pursuant to the Sale and Servicing
Agreement, the Seller will sell the Receivables to the Trust and the Servicer
will service the Receivables on behalf of the Trust. In addition, pursuant to
the Sale and Servicing Agreement, the Servicer will agree to perform certain
administrative tasks imposed on the Trust under the Indenture. The Notes will be
issued pursuant to the Indenture to be dated as of May 31, 1997 (as amended and
supplemented from time to time, the "Indenture"), between the Trust and The
Chase Manhattan Bank, a New York banking corporation (the "Indenture Trustee"
and in its capacity as collateral agent, the "Indenture Collateral Agent"). The
Certificates, each representing a fractional undivided interest in the Trust,
will be issued pursuant to a Trust Agreement to be dated as of May 31, 1997,
between the Seller and Bankers Trust (Delaware), as owner trustee (the "Owner
Trustee"). The Policies will be issued pursuant to the Insurance Agreement dated
as of May 31, 1997 by and among the Insurer, TMSI, the Seller, the Servicer, the
Trust, the Indenture Trustee and the Owner Trustee. In connection with the
transactions contemplated hereby, the Representative, the Insurer and TMSI will
enter into an Indemnification Agreement dated as of June 26, 1997 (the
"Indemnification Agreement").
Prior to the delivery of the Securities by the Seller, and the public
offering thereof by the Underwriters, the Representative, the Seller and TMSI
shall enter into an agreement substantially in the form of Exhibit A hereto (the
"Pricing Agreement"), which shall specify such applicable information as is
indicated in, and be in substantially the form of, Exhibit A hereto. The
offering of the Securities will be governed by this Agreement, as supplemented
by the Pricing Agreement. From and after the date of the execution and delivery
of the Pricing Agreement, this Agreement shall be deemed to incorporate the
Pricing Agreement. Capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed thereto in the Sale and Servicing Agreement or,
if not defined therein, in the Indenture.
The Seller and TMSI understand that the Underwriters propose to make a
public offering of the Securities as soon as the Underwriters deem advisable
after the Pricing Agreement has been executed and delivered.
Section 1. REPRESENTATIONS AND WARRANTIES OF TMSI AND THE SELLER.
(a) TMSI and the Seller represent and warrant to each of the Underwriters
as of the date hereof and, if the Pricing Agreement is executed on a date other
than the date hereof, as of the date of the Pricing Agreement (such latter date
being hereinafter referred to as the "Representation Date") as follows:
(i) TMSI and the Seller have filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(No. 333-14075) including a prospectus, and such amendments thereto as may
have been required to the date hereof, relating to the Securities and the
offering thereof from time to time in accordance with Rule 415 under the
Securities Act of 1933, as amended (the "1933 Act"), and such registration
statement, as amended, has become effective. Such registration statement,
as amended, and the prospectus relating to the sale of the Securities
constituting a part thereof as from time to time amended or supplemented
(including any prospectus supplement (the "Prospectus Supplement") filed
with the Commission pursuant to Rule 424 of the rules and regulations of
the Commission under the 1933 Act (the "1933 Act Regulations") and any
information incorporated therein by reference are respectively referred to
herein as the "Registration Statement" and the "Prospectus." The conditions
of Rule 415 under the 1933 Act have been satisfied with respect to TMSI,
the Seller and the Registration Statement.
(ii) At the time the Registration Statement became effective and
at the Representation Date, the Registration Statement complied and will
comply in all material respects with the requirements of the 1933 Act, the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and the
1933 Act Regulations, and did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus, at the Representation Date (unless the term "Prospectus" refers
to a prospectus which has been provided to the Underwriters by TMSI and the
Seller for use in connection with the offering of the Securities which
differs from the Prospectus on file at the Commission at the time the
Registration Statement became effective, in which case at the time it is
first provided to the Underwriters for such use) and at Closing Time
referred to in Section 2 hereof, will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to TMSI and the Seller in writing by
any Underwriter through the Representative expressly for use in the
Registration Statement or Prospectus and provided further, that the Company
makes no representations or warranties as to any information in any
Computational Materials (as defined in Section 11 below) provided by any
Underwriter to the Company pursuant to Section 11, except to the extent of
any errors in the Computational Materials that are caused by errors in the
pool information provided by the Company to the applicable Underwriter. The
conditions to the use by TMSI and the Seller of a registration statement on
Form S-3 under the 1933 Act, as set forth in the General Instructions to
Form S-3, have been satisfied with respect to the Registration Statement
and the Prospectus.
(iii) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise
stated therein, (A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Seller, the Servicer, TMSI and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course
of business, which would have a material adverse effect on the ability of
each of TMSI, the Seller and the Servicer to perform its obligations under
the Basic Documents (as defined below) to which it is a party and (B) there
have been no transactions entered into by the Seller, the Servicer, TMSI or
any of its subsidiaries, other than those in the ordinary course of
business, which would have a material adverse effect on the ability of the
Seller, the Servicer or TMSI to perform its obligations under this
Agreement, the Pricing Agreement, the Sale and Servicing Agreement, the
Trust Agreement, the Purchase Agreement, the Indemnification Agreement and
the Insurance Agreement (this Agreement, the Pricing Agreement, the Sale
and Servicing Agreement, the Trust Agreement, the Purchase Agreement, the
Indemnification Agreement and the Insurance Agreement being herein referred
to, collectively, as the "Basic Documents") to which it is a party.
(iv) Each of TMSI, the Seller and the Servicer has been duly
organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation with all requisite power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform its
obligations under the Basic Documents to which it is a party; and each is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a material
adverse effect on, (A) the ability of any of TMSI, the Seller or the
Servicer to perform its obligations under the Basic Documents to which it
is a party, or (B) the business, properties, financial position, operations
or results of operations of TMSI, the Seller or the Servicer.
(v) Any person who signed this Agreement on behalf of TMSI or the
Seller was, as of the time of such signing and delivery, and is now duly
elected or appointed, qualified and acting, and the Agreement, as so
executed, is duly and validly authorized, executed, and constitutes the
valid, legal and binding agreement of each of TMSI and the Seller,
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights in general and by general
principles of equity regardless of whether such enforcementis considered in
a proceeding in equity or at law.
(vi) Each Basic Document to which it is a party has been duly and
validly authorized by TMSI, the Seller and the Servicer and, when executed
and delivered by TMSI, the Seller and the Servicer, as the case may be, and
duly and validly authorized, executed and delivered by the other parties
thereto, will constitute, the valid and binding agreement of TMSI, the
Seller and the Servicer, as the case may be, enforceable in accordance with
their terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of creditors' rights in general and by general principles of equity
regardless of whether such enforcement is considered in a proceeding in
equity or at law; and such Basic Documents and the Policies conform in all
material respects to the statements relating thereto contained in the
Prospectus.
(vii) The Notes, when duly and validly executed by the Indenture
Trustee, authenticated and delivered in accordance with the Indenture, and
delivered and paid for pursuant hereto will be validly issued and
outstanding and entitled to the benefits of the Indenture. The
Certificates, when duly and validly executed by the Owner Trustee,
authenticated and delivered in accordance with the Trust Agreement, and
delivered and paid for pursuant hereto will be validly issued and
outstanding and entitled to the benefits of the Trust Agreement. The
Securities conform in all material respects to all statements relating
thereto contained in the Prospectus.
(viii) Neither the grant of the security interest in the
Collateral to the Indenture Collateral Agent pursuant to the Indenture, nor
the issuance or delivery of the Notes or the Certificates, nor the
consummation of any other of the transactions herein contemplated or in any
other Basic Document, nor the execution and delivery by each of TMSI, the
Seller and the Servicer of the Basic Documents to which it is a party, nor
the fulfillment of the terms of the Notes or the Certificates or each such
Basic Document will result in the breach of any term or provision of the
charter or by-laws of TMSI, the Seller or the Servicer, and none of TMSI,
the Seller and the Servicer is in breach or violation of or in default (nor
has an event occurred which with notice or lapse of time or both would
constitute a default) under the terms of (A) any material obligation,
agreement, covenant or condition contained in any material contract,
indenture, loan agreement, note, lease or other material instrument to
which it is a party or by which it may be bound, or to which any of its
property or assets is subject, or (B) any law, decree, order, rule or
regulation applicable to TMSI, the Seller, the Servicer or the Receivables
of any court or supervisory, regulatory, administrative or governmental
agency, body or authority, or arbitrator having jurisdiction over any such
entity or its properties or the Receivables, the default in or the breach
or violation of which would have a material adverse effect on TMSI, the
Seller or the Servicer or the ability of any such entity to perform its
obligations under the Basic Documents to which it is a party; and neither
the issuance or delivery of the Notes or the Certificates, nor the
consummation of any other of the transactions herein contemplated, nor the
fulfillment of the terms of the Notes or the Certificates or the Basic
Documents will result in such a breach, violation or default which would
have such a material adverse effect.
(ix) Except as described in the Prospectus, there is no action,
suit or proceeding against or investigation of TMSI, the Seller or the
Servicer now pending, or, to the knowledge of TMSI or the Seller,
threatened against TMSI, the Seller or the Servicer, before any court,
governmental agency or body (A) which is required to be disclosed in the
Prospectus (other than as disclosed therein) or (B) (1) asserting the
invalidity of any Basic Document or the Notes or the Certificates, (2)
seeking to prevent the issuance of the Notes or the Certificates or the
consummation of any of the transactions contemplated by the Basic
Documents, (3) which would materially and adversely affect the performance
by any of TMSI, the Seller or the Servicer of its obligations under the
Basic Documents to which it is a party, or the validity or enforceability
of any Basic Document or the Notes or the Certificates or (4) seeking to
adversely affect the federal income tax attributes of the Notes or the
Certificates described in the Prospectus; all pending legal or governmental
proceedings to which TMSI, the Seller or the Representative is a party or
of which any of their respective property or assets is the subject which
are not described in the Prospectus, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not material
to TMSI's, the Seller's and the Servicer's ability to perform their
respective obligations under the Basic Documents to which each is a party.
(x) Each of TMSI, the Seller and the Servicer possesses such
licenses, certificates, authorities or permits issued by the appropriate
state or federal regulatory agencies or governmental bodies necessary to
conduct the businesses now conducted by it (except where the failure to
possess any such license, certificate, authority or permit would not
materially and adversely affect the holders of the Notes or the
Certificates) and none has received any notice of proceedings relating to
the revocation or modification of any such license, certificate, authority
or permit which, singly or in the aggregate, if the subject of any
unfavorable decision, ruling or finding, would materially and adversely
affect the ability of such entity to perform its obligations under the
Basic Documents to which it is a party.
(xi) No authorization, approval or consent of any court or
governmental authority or agency is necessary in connection with the
issuance or sale of the Securities hereunder, except such as may be
required under the 1933 Act, the Trust Indenture Act or the 1933 Act
Regulations or state securities laws.
(xii) At the time of execution and delivery of the Sale and
Servicing Agreement by TMSI, the Seller, the Servicer and the Trust, the
Trust will have acquired good title to the Initial Receivables (including
an assignment of the security interests in the Financed Vehicles securing
the Initial Receivables and the proceeds of each of the foregoing), free
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity, and, upon delivery to the Underwriters of the Securities,
the Underwriters will have good and marketable title to the Securities free
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity. At each Subsequent Transfer Date, the Trust will have
acquired good title to the Subsequent Receivables (including an assignment
of the security interests in the Financed Vehicles securing the Subsequent
Receivables and the proceeds of each of the foregoing), free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(xiii) The transfer of the Initial Receivables by TMS Auto
Finance to the Seller, and by the Seller to the Trust at Closing Time will
be treated by TMS Auto Finance and the Seller for financial accounting and
reporting purposes as a sale of assets and not as a pledge of assets to
secure debt. The transfer of the Subsequent Receivables by TMS Auto Finance
to the Seller, and by the Seller to the Trust at the applicable Subsequent
Transfer Date will be treated by TMS Auto Finance and the Seller for
financial accounting and reporting purposes as a sale of assets and not as
a pledge of assets to secure debt.
(xiv) Any taxes, fees and other governmental charges that are
assessed and due in connection with the execution, delivery and issuance of
the Basic Documents and the Securities which have become due or will become
due on or prior to Closing Time shall have been paid at or prior to Closing
Time.
(xv) The Trust is not required to be registered as an "investment
company" under the Investment Company Act of 1940 (the "1940 Act").
(xvi) The Receivables are chattel paper as defined in the UCC as
in effect in the State of California.
(b) Any certificate signed by any officer of TMSI, the Seller or the
Servicer and delivered to the Representative on behalf of the Underwriters or
counsel for the Underwriters shall be deemed a representation and warranty by
TMSI, the Seller and the Servicer as to the matters covered thereby.
Section 2. DELIVERY TO THE UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Seller agrees to cause
the Trust to sell the Securities to the Underwriters. In the event that the
initial remittance rates and prices for the Securities have not been agreed upon
and the Pricing Agreement has not been executed and delivered by all parties
thereto by the close of business on the fourth business day following the date
of this Agreement, this Agreement shall terminate forthwith, without liability
of any party to any other party, unless otherwise agreed upon by the
Representative, TMSI and the Seller.
(b) Delivery of the Certificates shall be made at the offices of Stroock &
Stroock & Lavan LLP, 180 Maiden Lane, New York, New York 10038, or at such other
place as shall be agreed upon by the Representative, TMSI and the Seller, at
10:00 A.M., New York City time, on June 26, 1997, or such other time not later
than ten business days after such date as shall be agreed upon by the
Representative, TMSI and the Seller (such time and date of payment and delivery
being herein called "Closing Time").
(c) The Securities to be delivered will be initially represented by one or
more Class A-1 Notes, one or more Class A-2 Notes and one or more Certificates
registered in the name of Cede & Co., the nominee of the Depository Trust
Company ("DTC").
For purposes of this Agreement, all Securities initially represented by one
or more certificates registered in the name of Cede & Co., the nominee of DTC,
shall be referred to herein, collectively, as the "DTC Securities."
The interests of beneficial owners of the DTC Securities will be
represented by book entries on the records of DTC and participating members
thereof. Definitive Notes and Definitive Certificates will be available in
exchange for DTC Securities only under the limited circumstances specified in
the Indenture and Trust Agreement. The DTC Securities to be purchased by the
Underwriters will be delivered by the Seller to the Underwriters (which delivery
shall be made through the facilities of DTC) against payment of the purchase
price therefor. Each of the Underwriters hereby agrees, severally and not
jointly, subject to the terms, conditions and provisions hereof, to purchase
from the Trust the Securities in the principal amounts set forth opposite its
name on Schedule I at the prices specified in the Pricing Agreement. The
purchase price shall be paid by the Representative by a same day federal funds
wire payable to the order of the Seller or its designee. The Securities will be
made available for examination by the Representative not later than 10:00 A.M.
on the last business day prior to Closing Time.
(d) The Securities shall be offered to the public from time to time for
sale in negotiated transactions or otherwise, at prices determined at the time
of sale.
Section 3. COVENANTS OF TMSI AND THE SELLER. TMSI and the Seller covenant
with each of the Underwriters as follows:
(a) Either TMSI or the Seller will promptly notify
the Representative, and confirm the notice in writing, (i) of any
amendment to the Registration Statement; (ii) of any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional
information; (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation or threatening of any proceedings for that purpose; and (iv)
of the receipt by either of any notification with respect to the
suspension of the qualification of the Notes or the Certificates for
sale in any jurisdiction or the initiation
or threatening of any proceedings for that purpose. TMSI and the
Seller will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment.
(b) Either TMSI or the Seller will give the
Representative notice of their intention to file or prepare
any amendment to the Registration Statement or any amendment or
supplement to the Prospectus (including any revised prospectus which
they propose for use by the Underwriters in connection with the
offering of the Securities which differs from the prospectus on file at
the Commission at the time the Registration Statement becomes
effective, whether or not such revised prospectus is required to be
filed pursuant to Rule 424(b) of the 1933 Act Regulations), will
furnish the Representative with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed filing or
use, as the case may be, and, unless required by law to do so, will not
file any such amendment or supplement or use any such prospectus to
which the Representative or counsel for the Underwriters shall
reasonably object.
(c) TMSI and the Seller will deliver to the
Representative as many signed and as many conformed copies of the
Registration Statement as originally filed and of each amendment
thereto (in each case including exhibits filed therewith) as the
Representative may reasonably request.
(d) TMSI and the Seller will furnish to the
Representative, from time to time during the period when the Prospectus
is required to be delivered under the 1933 Act or the Securities
Exchange Act of 1934, as amended (the "1934 Act"), such number of
copies of the Prospectus (as amended or supplemented) as the
Representative may reasonably request for the purposes contemplated by
the 1933 Act or the 1934 Act or the respective applicable rules and
regulations of the Commission thereunder.
(e) If any event shall occur as a result of which it
is necessary, in the reasonable opinion of counsel for the
Underwriters, to amend or supplement the Prospectus in order to make
the Prospectus not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, TMSI and the
Seller will forthwith amend or supplement the Prospectus (in form and
substance satisfactory to counsel for the Underwriter) so that, as so
amended or supplemented, the Prospectus will not include an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, and TMSI and the Seller will furnish to the Representative
a reasonable number of copies of such amendment or supplement. Neither
the consent of the Representative of, nor the delivery by the
Representative of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 5.
(f) TMSI and the Seller will endeavor, in
cooperation with the Underwriter, to qualify the Securities
for offering and sale under the applicable securities laws of such
states and other jurisdictions of the United States as the
Representative may designate; provided, however, that neither TMSI nor
the Seller shall be obligated to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified. In each jurisdiction
in which the Securities have been so qualified, TMSI and the Seller
will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect for a
period of not less than one year from the date hereof.
(g) TMSI and the Seller will file with the Commission
such reports on Form SR as may be required pursuant to Rule 463 under
the 1933 Act.
(h) So long as any Notes or Certificates shall be
outstanding, TMSI and the Seller will deliver to the Underwriters, as
promptly as practicable, such information concerning TMSI, the Seller,
the Servicer or the Notes or other Certificates as the Representative
may reasonably request from time to time.
Section 4. PAYMENT OF EXPENSES. TMSI and the Seller will pay all expenses
incident to the performance of their obligations under this Agreement, including
(i) the printing (or other reproducing) and filing of the Registration Statement
as originally filed and of each amendment thereto (other than amendments
relating to the filing of Computational Materials pursuant to Section 11); (ii)
the reproducing of the Basic Documents and the Indenture; (iii) the preparation,
printing, issuance and delivery of the DTC Securities to the Underwriters; (iv)
the fees and disbursements of (A) the Underwriters' counsel, (B) accountants for
TMSI and the Seller and issuer of the comfort letter, (C) the Indenture Trustee
and its counsel, (D) the Owner Trustee and its counsel, and (E) DTC in
connection with the book-entry registration of the DTC Securities; (v) the
qualification of the Securities under state securities laws in accordance with
the provisions of Section 3(f) hereof, including filing fees and the fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey; (vi) the printing (or
other reproducing) and delivery to the Underwriters of copies of the
Registration Statement as originally filed and of each amendment thereto, of
each preliminary prospectus and of the Prospectus and any amendments or
supplements thereto; (vii) the fees charged by the Insurer; (viii) the fees
charged by each of Standard & Poor's Structured Ratings Group, a division of The
McGraw-Hill Companies, Inc. ("S&P") and Moody's Investors Service, Inc.
("Moody's") for rating the Securities; and (ix) the reproducing and delivery to
the Underwriters of copies of the Blue Sky Survey.
If this Agreement is terminated by the Representative in accordance with
the provisions of Section 5 or Section 9(a)(i) (unless, in the case of Section
9(a)(i), such termination arises from a change or development involving a
prospective change in or affecting the business or properties of the Insurer),
TMSI and the Seller shall reimburse the Representative for all of its reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
Section 5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties of TMSI and the Seller herein contained or in any of the Basic
Documents, to the performance by TMSI and the Seller of their respective
obligations hereunder, and to the following further conditions:
(a) The Registration Statement shall have become
effective and, at Closing Time, no stop order suspending
the effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by
the Commission. As of the Closing Time, the Prospectus shall have been
filed with the Commission in accordance with Rule 424 of the 1933 Act
Regulations.
(b) At Closing Time, the Representative shall
have received:
(i) The favorable opinion, dated
as of Closing Time, of Stroock & Stroock & Lavan LLP, counsel
for the Underwriters, to the effect that:
(A) The Registration
Statement is effective under the 1933 Act, and,
to the best of their knowledge and information,
no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933
Act or proceedings therefor initiated or threatened
by the Commission.
(B) At the time the
Registration Statement became effective and at
the Representation Date, the Registration
Statement (other than the financial, numerical,
statistical and quantitative information included
therein, as to which no opinion need be rendered)
complied as to form in all material respects with the
requirements of the 1933 Act and the Rules and
Regulations thereunder.
(C) The information in
the Prospectus under "The Notes," "The Certificates"
and "Description of the Purchase Agreements and the
Trust Documents" and the information in the
Prospectus Supplement under "Description of the
Notes" and "Description of the Certificates" insofar
as they constitute summaries of certain provisions of
the Notes, the Certificates, the Indenture and the
Trust Agreement, summarizes fairly such provisions.
(D) The information in
the base Prospectus under "Prospectus Summary -- Tax
Status," "Prospectus Summary -- ERISA Considerations"
"Federal Income Tax Consequences," and "ERISA
Considerations" and in the Prospectus Supplement
under "Summary of Terms -- Tax Status," "Summary of
Terms -- ERISA Considerations," "Certain Federal
Income Tax Consequences," and "ERISA Considerations,"
to the extent that they constitute matters of
federal, New York or California law, summaries of
legal matters, documents or proceedings or legal
conclusions, has been reviewed by them and is correct
in all material respects.
(E) The Seller and the
Servicer have been duly incorporated and are
validly existing and in good standing under the
laws of the State of Delaware.
(F) The Seller has the
power to engage in the transactions contemplated by
each of this Agreement, the Pricing Agreement, the
Indemnification Agreement and the Trust Agreement,
and the Seller and the Servicer have the power to
engage in the transactions contemplated by each of
the Sale and Servicing Agreement, the Insurance
Agreement and the Purchase Agreement, and have all
requisite power, authority and legal right to execute
and deliver this Agreement, the Pricing Agreement,
the Sale and Servicing Agreement, the Purchase
Agreement, the Indemnification Agreement, the
Insurance Agreement and the Trust Agreement, as the
case may be (and any other documents delivered in
connection therewith) and to perform
and observe the terms and conditions of such
instruments.
(G) Each of the Sale
and Servicing Agreement, the Insurance Agreement and
the Purchase Agreement has been duly authorized,
executed and delivered by the Seller and the
Servicer, and each of the Trust Agreement, the
Indemnification Agreement, the Pricing Agreement and
this Agreement has been duly authorized, executed and
delivered by the Seller. Assuming due authorization,
execution and delivery by the other parties thereto,
the Sale and Servicing Agreement, the Purchase
Agreement, the Indemnification Agreement, the
Insurance Agreement, the Trust Agreement, the Pricing
Agreement and this Agreement are legal, valid and
binding agreements enforceable in accordance with
their respective terms against the Seller and the
Servicer, as the case may be, subject (a) to the
effect of bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting
creditors' rights generally and court decisions with
respect thereto, (b) to the understanding that no
opinion is expressed as to the application of
equitable principles in any proceeding, whether at
law or in equity, and (c) to limitations of public
policy under applicable securities laws as to rights
of indemnity and contribution thereunder.
(H) The Receivables are
chattel paper as defined in the UCC as in effect
in the State of California.
(I) The Seller is not,
and will not as a result of the offer and sale
of the Securities as contemplated in the
Prospectus and this Agreement become, an "investment
company" as defined in the Investment Company Act of
1940, as amended (the "Investment Company Act"), or a
company "controlled by" an "investment company"
within the meaning of the Investment Company Act.
(J) All actions
required to be taken and all filings required to be
made by the Seller or the Trust under the 1933 Act
and the 1934 Act prior to the sale of the Securities
have been duly taken or made.
(K) The Trust Agreement
need not be qualified under the Trust Indenture
Act and the Trust is not required to register under
the Investment Company Act.
(L) The Indenture has
been duly qualified under the Trust Indenture
Act.
Stroock & Stroock & Lavan LLP
shall additionally provide an opinion, in form and substance
satisfactory to the Rating Agencies, that if a court concludes
that the transfer of the Receivables from the Seller to the
Owner Trustee on behalf of the Trust is a sale, the interest
of the Trust in the Receivables, the interest of the Trust in
the Seller's security interests in the Financed Vehicles
securing the Receivables and the proceeds of each of the
foregoing will be perfected upon the filing of appropriate
UCC-1 financing statements and, if a court concludes that such
transfer is not a sale, the Sale and Servicing Agreement
constitutes a grant by the Seller to the Trust of a valid
security interest in the Receivables, the interest of the
Trust in the Seller's security interests in the Financed
Vehicles securing the Receivables and the proceeds of each of
the foregoing, which security interest will be perfected upon
the filing of appropriate UCC-1 financing statements.
Stroock & Stroock & Lavan LLP
shall additionally provide an opinion, in form and substance
satisfactory to the Rating Agencies, regarding the creation
and attachment of a security interest in the Collateral
(including, without limitation, the Trust Estate, as to which
such opinion shall also cover the perfection and priority of
the Indenture Collateral Agent's interest therein) in favor of
the Indenture Trustee on behalf of the Noteholders. Such
opinions may contain such assumptions, qualifications and
limitations as are customary in opinions of this type and are
reasonably acceptable to counsel to the Underwriters. In
rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other
than the federal law of the United States of America and the
laws of the States of New York and California.
In rendering its opinion, Stroock
& Stroock & Lavan LLP shall additionally state that nothing
has come to its attention that has caused it to believe that
the Registration Statement, at the time it became effective,
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading or
that the Prospectus, at the Representation Date (unless the
term "Prospectus" refers to a prospectus which has been
provided to the Underwriters by TMSI for use in connection
with the offering of the Securities which differs from the
Prospectus on file at the Commission at the Representation
Date, in which case at the time it is first provided to the
Underwriters for such use) or at
Closing Time, included an untrue statement of a material fact
or omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading (other than (i) the
financial, numerical, statistical and quantitative information
contained therein and (ii) the information under the heading
"The Insurer," as to which such counsel need express no view).
In rendering its opinions, Stroock
& Stroock & Lavan LLP may rely on certificates of responsible
officers of the Seller, the Indenture Trustee, the Owner
Trustee, and public officials or, as to matters of law other
than New York, California or Federal law or the General
Corporation Law of the State of Delaware, on opinions of other
counsel (copies of which opinions shall be delivered to you).
Such opinion may contain such assumptions, qualifications and
limitations as are customary in opinions of this type and are
reasonably acceptable to the Representative.
(ii) The favorable opinion of Stroock & Stroock & Lavan LLP, special
California counsel for the Seller and the Servicer, dated as of the Closing Time
to the effect that (i) noting the assignee's name on a certificate of title,
where a validly perfected security interest in a motor vehicle, registered in
California and for which a certificate of title has been issued by the
Department of Motor Vehicles of the State of California, is not necessary to
continue the perfection of the security interest assigned as against the debtor
on the Contract, creditors and transferees of the debtor on the Contract, and
(ii) the Indenture Collateral Agent has acquired a perfected first priority
security interest in the Financed Vehicles located in the State of California
and subject to the statutes, laws and regulations governing motor vehicles
located in the State of California. Such opinion may contain such assumptions,
qualifications and limitations as are customary in opinions of this type and are
reasonably acceptable to counsel to the Underwriters. In rendering such opinion,
such counsel may state that they express no opinion as to the laws of any
jurisdiction other than the federal law of the United States of America and the
laws of the State of California.
(iii) The favorable opinion, dated as of Closing Time, of corporate counsel
for the Seller, the Servicer and TMSI, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(A) TMSI has been duly
organized and is validly existing and is in good
standing under the laws of the State of New Jersey.
(B) TMSI has the power
to engage in the transactions contemplated by
this Agreement, the Pricing Agreement, the Sale
and Servicing Agreement, the Indemnification
Agreement and the Insurance Agreement and has
all requisite power, authority and legal right
to execute and deliver this Agreement, the
Pricing Agreement, the Sale and Servicing Agreement,
the Indemnification Agreement and the Insurance
Agreement (and any other documents delivered in
connection therewith) and to perform and observe the
terms and conditions of
such instruments.
(C) This Agreement,
the Pricing Agreement, the Sale and Servicing
Agreement, the Indemnification Agreement and the
Insurance Agreement have been duly authorized,
executed and delivered by TMSI and, assuming due
authorization, execution and delivery by the other
parties thereto, are legal, valid and binding
agreements of TMSI and assuming such agreements were
governed by the laws of the State of New Jersey,
would be enforceable in accordance with their
respective terms against TMSI subject (a) to the
effect of bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting
creditors' rights generally and court decisions with
respect thereto, (b) to the understanding that no
opinion is expressed as to the application of
equitable principles in any proceeding, whether at
law or in equity, and (c) to limitations of public
policy under applicable securities laws as
to rights of indemnity and contribution
thereunder.
(D) Neither the
transfer of the Receivables by the Seller to the
Owner Trustee on behalf of the Trust, nor the
assignment by the Seller of the Trust Estate to the
Trust, nor the consummation of the transactions
contemplated by, nor the fulfillment of the terms of,
the Sale and Servicing Agreement, the Indemnification
Agreement, the Insurance Agreement, the Purchase
Agreement, this Agreement and the Pricing Agreement,
in the case of the Seller and TMSI, and the Sale and
Servicing Agreement, the Insurance Agreement and the
Purchase Agreement, in the case of the Servicer, and
the Trust Agreement, in the case of the Seller,
conflicts or will conflict with or results or will
result in a breach of or constitutes or will
constitute a default under (a) the Certificate of
Incorporation or Bylaws of TMSI, the Seller or the
Servicer, as applicable, (b) the terms of any
material indenture or other material agreement or
instrument of which counsel has knowledge to which
TMSI, the Seller or the Servicer, as applicable, is a
party or by which it is bound or to which it is
subject or (c) any
statute or order, rule, regulation, writ,
injunction or decree of which counsel has
knowledge, or of any court, governmental
authority or regulatory body to which TMSI, the
Seller or the Servicer, as applicable, is
subject or by which it is bound, or results in,
or will result in the creation or imposition of any
lien or encumbrance upon the Trust Estate or upon the
related Securities, except as otherwise
contemplated by the Indenture.
(E) No consent,
approval, authorization or order of any court or
governmental agency or body is required for the
execution, delivery and performance by TMSI or the
Seller of, or compliance by TMSI or the Seller with,
this Agreement, the Pricing Agreement, the Sale and
Servicing Agreement, the Indemnification Agreement or
the Insurance Agreement, or the offer, issuance, sale
or delivery of the Securities, or, in the case of the
Servicer, by the Servicer of, or compliance by the
Servicer with, the Sale and Servicing Agreement, the
Insurance Agreement or the Purchase Agreement, or, in
the case of the Seller, by the Seller of, or
compliance of the Seller with, the Trust Agreement or
the consummation of any other transactions by TMSI,
the Seller or the Servicer contemplated by the Sale
and Servicing Agreement, the Purchase Agreement, this
Agreement, the Indemnification Agreement, the
Insurance Agreement, the Trust Agreement and the
Pricing Agreement, as the case may be, except as may
be required under the blue sky laws of any
jurisdiction (as to which such counsel need not
opine) and such other approvals as have been
obtained.
(F) Except as set forth
in the Prospectus Supplement, there is no
action, suit, proceeding or investigation
pending or, to the best of such counsel's
knowledge, threatened against the Seller, the
Servicer or TMSI which, in such counsel's
judgment, either in any one instance or in the
aggregate, may result in any material adverse
change in the business, operation, financial
condition, properties or assets of the Seller,
the Servicer or TMSI or in any material
impairment of the right or ability of the
Seller, the Servicer or TMSI to carry on its
business substantially as now conducted or result
in any material liability on the part of the
Seller, the Servicer or TMSI or which would draw
into question the validity of this Agreement, the
Pricing Agreement, the Certificates, the
Purchase Agreement, the Indemnification
Agreement, the Insurance Agreement, the Trust
Agreement, the Sale and Servicing Agreement or of any
action taken or to be taken in connection with the
transactions contemplated thereby, or which would be
likely to impair materially the ability of any of the
Seller, the Servicer or TMSI to perform under the
terms of this Agreement, the Pricing Agreement, the
Purchase Agreement, the Indemnification Agreement,
the Insurance Agreement, the Sale and Servicing
Agreement or the Trust Agreement, as applicable.
In rendering its opinions, such
counsel may rely on certificates of responsible officers of
the Seller, the Servicer and TMSI, and public officials or, as
to matters of law other than New Jersey or the Federal law, on
opinions of other counsel (copies of which opinions shall be
delivered to you). Such opinion may contain such assumptions,
qualifications and limitations as are customary in opinions of
this type and are reasonably acceptable to the Representative.
(iv) The favorable opinion of
in-house counsel to the Servicer, or such other counsel
acceptable to counsel for the Underwriters, dated as of
Closing Time, satisfactory in form and substance to counsel
for the Underwriters, to the effect that:
Such counsel has been
advised of the Servicer's standard operating
procedures relating to the Servicer's acquisition of
a perfected first priority security interest in the
vehicles financed by the Servicer pursuant to the
retail installment sale contracts in the ordinary
course of the Servicer's business. Assuming that the
Servicer's standard procedures are followed with
respect to the perfection of security interests in
the Financed Vehicles (such counsel having no
reason to believe that the Servicer has not or
will not continue to follow its standard
procedures in connection with the perfection of
security interests in the Financed Vehicles), the
Servicer has acquired or will acquire a
perfected first priority security interest in
the Financed Vehicles.
Such opinion may contain such
assumptions, qualifications and limitations as are customary
in opinions of this type and are reasonably acceptable to
counsel to the Underwriters.
(v) The favorable opinion, dated
as of Closing Time, of counsel for the Insurer, in form and
substance satisfactory to counsel for the Underwriters, to the
effect that:
(A) The Insurer is a
stock insurance company duly organized, validly
existing and authorized to transact financial
guaranty insurance business under the laws of
the State of New York.
(B) The Policies, the
Indemnification Agreement and the Insurance Agreement
have been duly authorized, executed and delivered by
the Insurer.
(C) The Policies, the
Indemnification Agreement and the Insurance Agreement
constitute valid and binding obligations of the
Insurer, enforceable against the Insurer in
accordance with their terms, subject, as to the
enforcement of remedies, to bankruptcy, insolvency,
reorganization, rehabilitation, moratorium and other
similar laws affecting the enforceability of
creditors' rights generally applicable in the event
of the bankruptcy or insolvency of the Insurer and to
the application of general principles of equity and
subject, in the case of the Insurance Agreement, to
principles of public policy limiting the right to
enforce the indemnification provisions contained
therein insofar as such provisions relate to
indemnification for liabilities arising under the
securities law.
(D) Each Policy is
exempt from registration under the Securities Act of
1933, as amended (the "Act").
(E) Neither the
execution nor the delivery by the Insurer of
each Policy, the Indemnification Agreement or
the Insurance Agreement, nor the performance by
it of its obligations thereunder, will conflict
with any provision of the certificate of
incorporation or the by-laws of the Insurer or,
to the best of such counsel's knowledge, result
in a breach of, or constitute a default under,
any agreement or other instrument to which the
Insurer is a party or by which it or any of its
property is bound or, to the best of such counsel's
knowledge, violate any judgment, order or decree
applicable to the Insurer of any governmental or
regulatory body, administrative agency, court or
arbitrator having jurisdiction over the Insurer
(except that in the published opinion of the
Securities and Exchange Commission the
indemnification provisions of the Indemnification
Agreement, insofar as they relate
to indemnification for liabilities arising under
the Act, are against public policy as expressed
in the Securities Act of 1933, as amended, and
are therefore unenforceable).
Such counsel shall additionally
state that nothing has come to its attention that has caused
it to believe that, as of the date of the Prospectus
Supplement, relating to the offer and sale of the Securities,
to the Prospectus forming a part of the Registration Statement
on Form S-3 (No. 333-14075) filed by the Company with the
Securities and Exchange Commission and declared effective on
December 9, 1996, or as of the date of counsel's opinion, the
information set forth under the captions "The Insurer" and
"The Policies" in the Prospectus Supplement, insofar as such
statements constitute a description of the Policies,
accurately summarize the Policies(such counsel not being
required to express an opinion with respect to any financial
statements or other financial information contained or
referred to therein). Such statement may be given with the
understanding that such information is limited and does not
purport to provide the scope of disclosure required to be
included in a prospectus with respect to a Registrant under
the Securities Act of 1933, as amended, in connection with the
public offer and sale of securities of such registrant.
In rendering this opinion, such
counsel may rely, as to matters of fact, on certificates of
responsible officers of the Insurer, the Trustee and public
officials. Such opinion may assume the due authorization,
execution and delivery of the instruments and documents
referred to therein by the parties thereto other than the
Insurer.
(vi) The favorable opinion, dated
as of Closing Time, of Richards, Layton & Finger, in form and
substance satisfactory, to counsel for the Underwriters, to
the effect that:
(A) The Owner Trustee
is a Delaware banking corporation duly incorporated
and organized and validly existing under the laws of
the State of Delaware.
(B) The Owner Trustee
has the full corporate trust power to accept the
office of owner trustee under the Trust Agreement and
to enter into and perform its obligations under the
Trust Agreement, the Sale and Servicing Agreement
and, on behalf of the Trust, under the Indenture and
the Sale and Servicing Agreement.
(C) The execution and
delivery of the Trust Agreement, the Sale and
Servicing Agreement and, on behalf of the Trust, of
the Indenture and the Sale and Servicing Agreement,
and the performance by the Owner Trustee of its
obligations under the Trust Agreement and the Sale
and Servicing Agreement, as well as the performance
by the Owner Trustee of its obligations on behalf of
the Trust under the Indenture and the Sale and
Servicing Agreement have been duly authorized by all
necessary action of the Owner Trustee and each has
been duly executed and delivered by the Owner
Trustee.
(D) The Trust Agreement
constitutes the valid and binding obligations of the
Owner Trustee enforceable against the Owner Trustee
in accordance with its terms.
(E) The execution and
delivery by the Owner Trustee of the Trust Agreement,
the Sale and Servicing Agreement and, on behalf of
the Trust, of the Indenture and the Sale and
Servicing Agreement do not require any consent,
approval or authorization of, or any registration or
filing with, any applicable governmental authority.
(F) Each of the Notes
and Certificates has been duly executed and
delivered by the Owner Trustee, on behalf of the
Trust.
(G) Neither the
consummation by the Owner Trustee of the
transactions contemplated in the Sale and
Servicing Agreement, the Indenture or the Trust
Agreement, nor the fulfillment of the terms thereof
by the Owner Trustee will conflict with, result in a
breach or violation of, or constitute a default under
any law or the charter, by-laws or other
organizational documents of the Owner Trustee or the
terms of any indenture or other agreement or
instrument known to such counsel and to which the
Owner Trustee or any of its subsidiaries is a party
or is bound or any judgment, order or decree known to
such counsel to be applicable to the Owner Trustee or
any of its subsidiaries of any court, regulatory
body, administrative agency, governmental body or
arbitrator having jurisdiction over the Owner Trustee
or any of its subsidiaries.
(H) There are no
actions, suits or proceedings pending or, to the best
of such counsel's knowledge, threatened against the
Owner Trustee (as owner trustee under the Trust
Agreement or in its individual capacity) before or by
any governmental authority that might materially and
adversely affect the performance by the Owner Trustee
of its obligations under, or the validity or
enforceability of, the Trust Agreement or the Sale
and Servicing Agreement, as applicable.
(I) The execution,
delivery and performance by the Owner Trustee of the
Sale and Servicing Agreement, the Indenture or the
Trust Agreement will not subject any of the property
or assets of the Trust or any portion thereof, to any
lien created by or resulting from any actions of the
Owner Trustee that are unrelated to the transactions
contemplated in such agreements.
(J) The Trust has been
duly formed and is validly existing as a
business trust under the Business Trust
Statute. The Trust Agreement authorizes the
Trust to execute and deliver the Trust
Agreement, the Indenture and the Sale and
Servicing Agreement, to issue the Notes and the
Certificates and to grant the Trust Estate to the
Trustee as security for the Notes.
(K) Assuming that the
Certificates have delivered to the Underwriter
and paid for pursuant to the Underwriting
Agreement, the Certificates have been validly
issued and are entitled to the benefits of the
Trust Agreement.
(L) To the extent that
Article 9 of the Uniform Commercial Code as in
effect in the State of Delaware (the "Delaware UCC")
is applicable (without regard to conflicts of laws
principles), and assuming that the security interest
created by the Indenture in the Receivables has been
duly created and has attached, upon the filing of a
UCC-1 financing statement with the Secretary of State
of the State of Delaware the Indenture Trustee will
have a perfected security interest in such
Receivables and the proceeds thereof, and such
security interest will be prior to any other security
interest that is perfected solely by the
filing of financing statements under the
Delaware UCC, excluding purchase money security
interests under Section 9-312(4) of the UCC and
temporarily perfected security interests in
proceeds under Section 9-306(3) of the Delaware
UCC.
(M) No re-filing or
other action is necessary under the Delaware UCC in
order to maintain the perfection of such security
interest except for the filing of continuation
statements at five year intervals.
(N) Under Section
3805(b) of the Business Trust Statute, no creditor of
any Certificateholder shall have any right to obtain
possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of
the Trust except in accordance with the terms of the
Trust Agreement.
(O) Under Section
3805(c) of the Business Trust Statute, and
assuming that the Sale and Servicing Agreement
conveys good title to the Receivables to the
Trust as a true sale and not as a security
arrangement, the Trust rather than the
Certificateholders is the owner of the Receivables.
(P) The Delaware
Trustee is not required to hold legal title to
the Trust Estate in order for the Trust to
qualify as a business trust under the Act.
(Q) The execution and
delivery by the Owner Trustee of the Trust
Agreement and, on behalf of the Trust, the
Indenture and the Sale and Servicing Agreement
do not require any consent, approval or
authorization of, or any registration or filing with,
any governmental authority of the State of Delaware,
except for the filing of the Certificate of Trust
with the Secretary of State.
(R) Neither the
consummation by the Owner Trustee of the transactions
contemplated in the Trust Agreement or, on behalf of
the Trust, the transactions contemplated in the Trust
Agreement, the Indenture and the Sale and Servicing
Agreement nor the fulfillment of the terms thereof by
the Owner Trustee will conflict with or result in a
breach or violation of any law of the State of
Delaware.
Such opinion may contain such assumptions,
qualifications and limitations as are customary in opinions
of this type and are reasonably acceptable to counsel to the
Underwriters. In rendering such opinion, such counsel may state that
they express no opinion as to the laws of any jurisdiction other than
the federal law of the United States of America and the laws of the
State of Delaware.
(vii) The favorable opinion,
dated as of Closing Time, of Dewey Ballantine, counsel for the
Indenture Trustee, the Indenture Collateral Agent, in form and
substance satisfactory to counsel for the Underwriters.
(viii) Such other opinions as may
be requested by (i) the Rating Agencies, which opinions shall
also be for the benefit of the Insurer and the Underwriters
and (ii) the Insurer, which opinions shall also be for the
benefit of the Underwriters.
(c) At Closing Time there shall not have been, since
the date hereof or since the respective dates as of which information
is given in the Registration Statement and the Prospectus, any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Seller, the
Servicer or TMSI and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the
Representative shall have received a certificate signed by one or more
duly authorized officers of TMSI and the Seller, dated as of Closing
Time, to the effect that (i) there has been no such material adverse
change; (ii) the representations and warranties in Section 1(a) hereof
are true and correct in all material respects with the same force and
effect as though expressly made at and as of Closing Time; (iii) each
of TMSI and the Seller has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to
Closing Time; and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been initiated or threatened by the Commission.
(d) At or prior to the delivery of the Prospectus
Supplement, the Representative shall have received from KPMG Peat
Marwick a letter dated as of such date and in form and substance
satisfactory to the Representative, to the effect that they have
carried out certain specified procedures, not constituting an audit,
with respect to (i) certain amounts, percentages and financial
information relating to the Servicer's servicing portfolio which are
included in the Prospectus Supplement and which are specified by the
Underwriter, and have found such amounts, percentages and financial
information to be in agreement with the relevant accounting, financial
and other records of the Servicer, (ii) certain information regarding
the Receivables and the Receivables Files which are specified by the
Representative and contained in the Prospectus Supplement and setting
forth the results of such specified procedures and (iii) certain
information regarding the Receivables and the Receivables Files which
are specified by the Representative, as representative of the
Underwriters, and contained in the Current Report on Form 8-K described
in Section 5(1) hereof and setting forth the results of such specified
procedures.
(e) At Closing Time, the Representative shall have
received from the Trustee a certificate signed by one or more duly
authorized officers of the Indenture Trustee, dated as of Closing Time,
as to the due acceptance of the Indenture by the Indenture Trustee and
the due authentication of the Notes by the Indenture Trustee and such
other matters as the Representative shall request.
(f) At Closing Time, the Representative shall have
received a certificate signed by one or more duly authorized officers
of the Seller, the Servicer and TMSI dated as of Closing Time to the
effect that:
(i) the representations and
warranties of TMSI, the Seller and the Servicer in each of the
Basic Documents to which it is a party are true and correct in
all material respects at and on the Closing Date, with the
same effect as if made on the Closing Date;
(ii) each of TMSI, the Seller and
the Servicer has complied with all the agreements and
satisfied all the conditions on its part to be
performed or satisfied in connection with the sale and
delivery of the Securities;
(iii) all statements and
information contained in the Prospectus Supplement under the
caption "The Receivables" and contained in the base Prospectus
under the captions "The Receivables," "The Seller," "TMS Auto
Finance," and "The Money Store" are true and accurate in all
material respects and nothing has come to such officer's
attention that would lead him to believe that any of the
specified sections contains any untrue statement of a material
fact or omits to state any material fact necessary in order to
make the statements and information therein, in the light of
the circumstances under which they were made, not misleading;
(iv) the information set forth in
the Schedule of Receivables required to be furnished
pursuant to the Sale and Servicing Agreement is true
and correct in all material respects;
(v) the copies of the Charter and
By-laws of the Seller, the Servicer and TMSI attached to such
certificate are true and correct and, are in full force and
effect on the date thereof;
(vi) except as may otherwise be
disclosed in the Prospectus, there are no actions, suits or
proceedings pending (nor, to the best knowledge of such
officers, are any actions, suits or proceedings threatened),
against or affecting the Seller, the Servicer or TMSI, which
if adversely determined, individually or in the aggregate,
would adversely affect the Seller's or Servicer's obligations
under any of the Basic Documents to which it is a party;
(vii) each person who, as an
officer or representative of the Seller, the Servicer or TMSI,
as the case may be, signed (a) this Agreement, (b) the Sale
and Servicing Agreement, (c) the Trust Agreement, (d) the
Purchase Agreement, (e) the Pricing Agreement, (f) the
Insurance Agreement, or (g) the Indemnification Agreement or
(h) any other document delivered prior hereto or on the date
hereof in connection with the purchase described in this
Agreement and the Sale and Servicing Agreement, was, at the
respective times of such signing and delivery, and is now duly
elected or appointed, qualified and acting as such officer or
representative;
(viii) except as otherwise set forth
in the Sale and Servicing Agreement, each of the Receivables
referred to in the Sale and Servicing Agreement was purchased
by the Seller from TMS Auto Finance, which acquired it from a
Dealer;
(ix) a certified true copy of the
resolutions of the board of directors of TMSI and the Seller
with respect to the sale of the Securities subject to this
Agreement and the Sale and Servicing Agreement, which
resolutions have not been amended and remain in full force and
effect are attached to such certificate;
(x) all payments received with
respect to the Initial Receivables after the Initial Cutoff
Date, and certain payments received with respect to the
Precomputed Receivables on or prior to the Initial Cutoff Date
that relate to Scheduled Payments due after the Cutoff Date,
as set forth in the Sale and Servicing Agreement, have been
deposited in the Collection Account, and are, as of the
Closing Date, in the Collection Account;
(xi) each of TMSI, the Seller and
the Servicer has complied with all the agreements and
satisfied all the conditions on its part to be
performed or satisfied in connection with the
issuance, sale and delivery of the Receivables and
the Securities;
(xii) all statements contained in
the Prospectus with respect to TMSI, the Seller and the
Servicer are true and accurate in all material respects and
nothing has come to such officer's attention that would lead
such officer to believe that the Prospectus contains any
untrue statement of a material fact or omits to state any
material fact;
(g) On or before the Closing Time the Seller shall
have delivered to the Trustee, to hold in trust for the benefit of the
holders of the Notes and Certificates, Initial Receivables with an
aggregate Principal Balance as of the Initial Cutoff Date of
approximately $185,927,062.83. TMSI and the Seller shall, immediately
following the sale of the Securities, cause to be deposited with the
Indenture Trustee, as collateral agent, for deposit (i) in the
Pre-Funding Account (as defined in the Prospectus Supplement), cash in
an amount equal to the sum of approximately $30,419,091.02 and (ii) in
the Capitalized Interest Account (as defined in the Prospectus
Supplement), cash in an amount equal to a sum satisfactory to the
Insurer.
(h) The Policies shall have been delivered to the
Trustee.
(i) At Closing Time, the Notes, and the Certificates
shall have been rated "AAA" by S & P and "AAA"
by Moody's and neither S&P nor Moody's shall have placed the Notes or
the Certificates under surveillance or review with possible negative
implications.
(j) At Closing Time, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the
issuance and delivery of the Securities as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by TMSI, the
Seller and the Servicer in connection with the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and
substance to TMSI and counsel for the Underwriters.
(k) On or before the Closing Time TMSI shall have delivered to
the Representative a Current Report on Form 8-K containing a detailed
description of the Receivables actually being delivered to the Owner
Trustee and pledged to the Indenture Trustee at Closing Time, in form
and substance satisfactory to the Representative.
(l) The Representative shall have received evidence
satisfactory to it that, on or before the Closing Date, UCC-1 financing
statements have been or are being filed in the
appropriate filing offices reflecting the transfer of the interest in
the Receivables to the Owner Trustee on behalf of the Trust and the
proceeds thereof to the Trust and the grant of the security interest by
the Trust in the Receivables and the proceeds thereof to the Indenture
Trustee.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Representative by notice to the Seller at any time at or prior to Closing time,
and such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof.
Section 6. INDEMNIFICATION.
(a) TMSI and the Seller jointly and severally agree to indemnify and hold
harmless each of the Underwriters and each person, if any, who controls either
of the Underwriters within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any untrue statement or omission
described in clause (i) above, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
TMSI; and
(iii) against any and all expense whatsoever, as reasonably
incurred (including, subject to Section 6(c) hereof, the reasonable
fees and disbursements of counsel chosen by such Underwriter) in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or
threatened, or any claim whatsoever based upon any untrue
statement or omission described in clause (i) above, or any
such alleged untrue statement or omission, to the extent
that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with the information referred to in clauses (w),
(x), (y) and (z) of the immediately following paragraph; provided, further, such
indemnity with respect to any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with the
information referred to in clauses (w), (x), (y) and (z) of the immediately
following paragraph and contained in the Prospectus or any preliminary
prospectus shall not inure to the benefit of either Underwriter (or person
controlling such Underwriter) from whom the person suffering any such loss,
claim, damage or liability purchased the Notes or Certificates which are the
subject thereof if such person did not receive a copy of the Prospectus at or
prior to the confirmation of the sale of such Notes or Certificates to such
person in any case where such delivery is required by the 1933 Act and the
untrue statement or omission of a material fact contained in any preliminary
prospectus was corrected in the Prospectus and the Prospectus was delivered to
such Underwriter in a timely manner in accordance with Section 3(d).
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless TMSI and the Seller, their directors, each of TMSI's and Seller's
officers who signed the Registration Statement, and each person, if any, who
controls TMSI or the Seller within the meaning of Section 15 of the 1933 Act
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, contained in written information furnished by such Underwriter
through the Representative specifically for use in the Prospectus Supplement, it
being understood and agreed that the only such information is contained in (w)
the seventh paragraph on the inside cover (discussing the risk of a lack of
secondary trading) of the Prospectus Supplement (or any amendment or supplement
thereto), (x) the first paragraph under "Risk Factors--Limited Liquidity" of the
Prospectus, (y) the information contained under "Underwriting" of the Prospectus
Supplement, and (z) any Computational Materials prepared by such Underwriter,
except to the extent of any errors in the Computational Materials that are
caused by errors in the pool information provided by the Company to the
applicable Underwriter. The parties hereto agree that no Underwriter shall be
under any liability to the Company, the Originators or any other person
identified in this paragraph (b) for Computational Materials prepared by any
other Underwriter.
(c) Promptly after receipt by an indemnified party under this Section 6 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof;
but the omission to so notify the indemnifying party will not relieve the
indemnifying party from any liability that it may have to any indemnified party
except to the extent that it has been prejudiced in any material respect by such
failure or from any liability that it may have otherwise than under this Section
6. In case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party or
parties shall have reasonably concluded that there may be legal defenses
available to it or them and/or other indemnified parties that are different from
or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party for any legal or
other expenses other than the reasonable costs of investigation subsequently
incurred in connection with the defense thereof unless (i) the indemnified party
shall have employed separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the next preceding sentence, (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party; and except that, if clause (i) or (iii) is
applicable, such liability shall be only in respect of the counsel referred to
in such clause (i) or (iii). After such notice from the indemnifying party to
such indemnified party, the indemnifying party will not be liable for the costs
and expenses of any settlement of such action effected by such indemnified party
without the consent of the indemnifying party. No indemnifying party shall,
without the prior written consent of the indemnified party, which consent shall
not be unreasonably withheld, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified party unless
such settlement includes an unconditional release of such indemnified party from
all liability on any claims that are the subject matter of such action.
Section 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, TMSI and the Seller
jointly and severally, on the one hand, and the Underwriters, on the other hand,
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by TMSI
and the Seller jointly and severally, on the one hand, and the Underwriters, on
the other hand (i) in such proportion as is appropriate to reflect the relative
benefits received by TMSI and the Seller on the one hand and the Underwriters on
the other from the sale of the Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of TMSI and the Seller on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by TMSI and
the Seller on the one hand and the Underwriters on the other shall be deemed to
be in such proportion that the Underwriters are responsible for that portion
represented by the excess, if any, of the purchase price received by the
Underwriters for the sale of the Securities over the purchase price paid by the
Underwriters for the Securities (the "Spread") (or, with respect to
Computational Materials furnished by an Underwriter, the Spread received by such
Underwriter with respect to the principal amount of Securities set forth next to
such Underwriter's name on Schedule I hereto; and TMSI and the Seller shall be
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by TMSI or the Seller or by any Underwriter
through the Representative and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this Section 7. Notwithstanding the
provisions of this Section 7, the Underwriters shall not be required to
contribute any amount in excess of the amount by which the Spread exceeds the
amount of any damages which the Underwriters have otherwise been required to pay
in respect of such losses, liabilities, claims, damages and expenses. For
purposes of this Section 7, each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Underwriters and each respective director of the Seller,
each officer of the Seller who signed the Registration Statement, and each
respective person, if any, who controls the Seller within the meaning of Section
15 of the 1933 Act shall have the same rights to contribution as the Seller.
Section 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement and
the Pricing Agreement, or contained in certificates of officers of TMSI and the
Seller submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of the Underwriters
or any controlling person thereof, or by or on behalf of TMSI or the Seller, and
shall survive delivery of the Securities to the Underwriters.
Section 9. TERMINATION OF AGREEMENT.
(a) The Representative may terminate this Agreement, by notice to TMSI and
the Seller, at any time at or prior to Closing Time (i) if there has been, since
the time of execution of this Agreement or since the respective dates as of
which information is given in the Registration Statement or Prospectus, any
change, or any development involving a prospective change, in or affecting
particularly the business or properties of TMSI, the Servicer or the Seller
considered as one entity or the Insurer which, in the Representative's
reasonable judgment, materially impairs the investment quality of the Notes or
the Certificates; (ii) if there has occurred any downgrading in the rating of
the claims-paying ability of the Insurer by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the 1933 Act) which, in the reasonable judgment of the Representative,
materially impairs the investment quality or marketability of the Notes or the
Certificates or if the claims-paying ability of the Notes or the Insurer has
been put on the "watch list" of any such rating organization with negative
implications; (iii) if there has occurred any suspension or limitation of
trading in securities generally on the New York Stock Exchange, or any setting
of minimum prices for trading on such exchange or by any governmental authority;
(iv) if any banking moratorium has been declared by Federal or New York
authorities; (v) any suspension or limitation of trading of any securities of
TMSI on any exchange or in the over-the-counter market; or (vi) if there has
occurred any outbreak or escalation of major hostilities in which the United
States of America is involved, any declaration of war by Congress, or any other
substantial national or international calamity or emergency if, in the
Representatives judgment, the effects of any such outbreak, escalation,
declaration, calamity, or emergency makes it impractical or inadvisable to
proceed with completion of the sale of and payment for the Notes or the
Certificates.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof.
Section 10. COMPUTATIONAL MATERIALS. (a) It is understood that any
Underwriter may prepare and provide to prospective investors certain
Computational Materials (as defined below) in connection with the Company's
offering of the Securities, subject to the following conditions:
(i) Each Underwriter shall comply with all applicable laws and regulations
in connection with the use of Computational Materials including the No-Action
Letter of May 20, 1994 issued by the Commission to Kidder, Peabody Acceptance
Corporation I, Kidder, Peabody & Co. Incorporated and Kidder Structured Asset
Corporation, as made applicable to other issuers and underwriters by the
Commission in response to the request of the Public Securities Association dated
May 24, 1994, and the No-Action Letter of February 17, 1995 issued by the
Commission to the Public Securities Association (collectively, the "Kidder/PSA
Letters").
(ii) As used herein, "Computational Materials" and the term "ABS Term
Sheets" shall have the meanings given such terms in the Kidder/PSA Letters, but
shall include only those Computational Materials that have been prepared or
delivered to prospective investors by or at the direction of an Underwriter.
(iii) Each Underwriter shall provide the Company with representative forms
of all Computational Materials prior to their first use, to the extent such
forms have not previously been approved by the Company for use by such
Underwriter. The Underwriter shall provide to the Company, for filing on Form
8-K as provided in Section 11(b), copies of all Computational Materials that are
to be filed with the Commission pursuant to the Kidder/PSA Letters. The
Underwriter may provide copies of the foregoing in a consolidated or aggregated
form. All Computational Materials described in this subsection (a)(iii) must be
provided to the Company not later than 10:00 a.m. New York time one business day
before filing thereof is required pursuant to the terms of this Agreement.
(iv) If an Underwriter does not provide any Computational Materials to the
Company pursuant to subsection (a)(iii) above, such Underwriter shall be deemed
to have represented, as of the Closing Date, that it did not provide any
prospective investors with any information in written or electronic form in
connection with the offering of the Certificates that is required to be filed
with the Commission in accordance with the Kidder/PSA Letters.
(v) In the event of any delay in the delivery by any Underwriter to the
Company of all Computational Materials required to be delivered in accordance
with subsection (a)(iii) above, the Company shall have the right to delay the
release of the Prospectus to investors or to any Underwriter, to delay the
Closing Date and to take other appropriate actions in each case as necessary in
order to allow the Company to comply with is agreement set forth in Section
11(b) to file the Computational Materials by the time specified therein.
(b) The Company shall file the Computational Materials (if any) provided to
it by each Underwriter under Section 11(a)(iii) with the Commission pursuant to
a Current Report on Form 8-K no later than 10:00 a.m. on the date required
pursuant to the Kidder/PSA Letters.
Section 11. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Representative shall be directed to Smith Barney Inc., 390 Greenwich Street, New
York, New York 10013, Attention: Asset Finance Group (fax: (212) 723-8855); and
notices to TMSI or the Seller shall be directed to it at 2840 Morris Avenue,
Union, New Jersey 07083, Attention: Executive Vice President (fax: (908)
686-2649).
Section 12. PARTIES. This Agreement and the Pricing Agreement shall each
inure to the benefit of and be binding upon the Underwriters, TMSI, the Seller
and their respective successors. Nothing expressed or mentioned in this
Agreement or the Pricing Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters, TMSI, the Seller and
their respective successors and the controlling persons and officers and
directors referred to in Section 6 and 7 hereof and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or with
respect to this Agreement or the Pricing Agreement or any provision herein or
therein contained. This Agreement and the Pricing Agreement and all conditions
and provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the Underwriters, TMSI, the Seller and their respective successors,
and said controlling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Notes or Certificates from any Underwriter shall be
deemed to be a successor by reason merely of such purchase. TMSI and the Seller
shall be jointly and severally liable for all obligations incurred under this
Agreement and the Pricing Agreement.
Section 13. GOVERNING LAW AND TIME. This Agreement and the Pricing
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without regard to principles of conflicts of laws, applicable
to agreements made and to be performed in said State. Unless otherwise set forth
herein, specified times of day refer to New York time.
Section 14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to TMSI and the Seller a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriters, the Seller and TMSI in accordance with its terms.
Very truly yours,
TMS AUTO HOLDINGS, INC.
By: ___________________
Name:
Title:
THE MONEY STORE INC.
By: ___________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
SMITH BARNEY INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: SMITH BARNEY INC.
By: _______________________
Name:
Title:
<PAGE>
SCHEDULE I
PRINCIPAL INITIAL
UNDERWRITER CLASS AMOUNT OF NOTES
Smith Barney Inc. A-1 $105,000,000
Merrill Lynch, Pierce, A-1 $ 55,000,000
Fenner & Smith Incorporated
Smith Barney Inc. A-2 $ 40,500,000
Merrill Lynch, Pierce, A-2 $ 20,000,000
Fenner & Smith Incorporated
PRINCIPAL INITIAL
UNDERWRITER CLASS AMOUNT OF
CERTIFICATES
Smith Barney Inc. $ 4,500,000
Merrill Lynch, Pierce, $ 0
Fenner & Smith Incorporated
<PAGE>
Exhibit A
THE MONEY STORE INC.
TMS AUTO HOLDINGS, INC.
The Money Store Auto Trust 1997-2
$160,000,000 Class A-1 6.17% Asset Backed Notes
$60,500,000 Class A-2 6.495% Asset Backed Notes
$4,500,000 6.64% Asset-Backed Certificates
PRICING AGREEMENT
June 19, 1997
SMITH BARNEY INC.
as Representative ("Representative")
of the several Underwriters
390 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated June 19, 1997 (the
"Underwriting Agreement"), relating to $160,000,000 aggregate principal amount
of Class A-1 6.17% Asset Backed Notes (the "Class A-1 Notes") $60,500,000
aggregate principal amount of Class A-2 6.495% Asset Backed Notes (the "Class
A-2 Notes" and, with the Class A-1 Notes the "Notes"), and $4,500,000 aggregate
principal amount of 6.64% Asset Backed Certificates (the "Certificates"), all
issued by The Money Store Auto Trust 1997-2 (the "Trust".)
Pursuant to Section 2 of the Underwriting Agreement, The Money Store Inc.
("TMSI") and TMS Auto Holdings, Inc. (the "Seller") agree with the
Representative on behalf of the Underwriters identified in Schedule I of the
Underwriting Agreement as follows:
1. The Class A-1 Interest Rate shall be 6.17% per annum.
2. The Class A-2 Interest Rate shall be 6.495% per annum.
3. The Certificate Rate shall be 6.64% per annum.
4. The purchase price for the Class A-1 Notes shall be 99.75% of the
initial principal amount of the Class A-1 Notes.
5. The purchase price for the Class A-2 Notes shall be 99.75% of the
initial principal amount of the Class A-2 Notes.
6. The purchase price for the Certificates shall be 99.75% of the
initial principal amount of the Certificates.
7. The Notes and Certificates shall be offered from time to time in
negotiated transactions or otherwise, at prices determined at the time of
sale.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Seller a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriters, TMSI and the Seller in accordance with its terms.
Very truly yours,
TMS AUTO HOLDINGS, INC.
By:
Name:
Title:
THE MONEY STORE INC.
By:
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
SMITH BARNEY INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: SMITH BARNEY INC.
By:
Name:
Title:
SALE AND SERVICING
AGREEMENT
among
THE MONEY STORE AUTO TRUST 1997-2
Issuer,
TMS AUTO HOLDINGS, INC.
Seller,
THE MONEY STORE AUTO FINANCE INC.
Servicer, and
THE MONEY STORE INC.
Representative
Dated as of May 31, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions........................................2
SECTION 1.2. Other Definitional Provisions......................25
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1. Conveyance of Initial Receivables..................26
SECTION 2.2. Conveyance of Subsequent Receivables...............27
ARTICLE III
THE RECEIVABLES
SECTION 3.1. Representations and Warranties of Seller...........31
SECTION 3.2. Repurchase upon Breach.............................36
SECTION 3.3. Custody of Receivable Files........................37
SECTION 3.4. Duties of Servicer as Custodian....................38
SECTION 3.5. Instructions; Authority To Act.....................39
SECTION 3.6. Custodian's Indemnification........................39
SECTION 3.7. Effective Period and Termination...................40
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1. Duties of Servicer.................................41
SECTION 4.2. Collection and Allocation of
Receivable Payments................................41
SECTION 4.3. Realization upon Receivables.......................42
SECTION 4.4. Physical Damage Insurance..........................43
SECTION 4.5. Maintenance of Security Interests in
Financed Vehicles..................................43
SECTION 4.5-A Segregation of Receivables Files...................43
SECTION 4.6. Covenants of Servicer..............................44
SECTION 4.7. Purchase of Receivables upon Breach................44
SECTION 4.8. Servicing Fee......................................45
SECTION 4.9. Servicer's Certificate.............................45
SECTION 4.10. Annual Statement as to Compliance;
Notice of Default..................................46
SECTION 4.11. Annual Independent Certified Public
Accountants' Report................................46
SECTION 4.12. Access to Certain Documentation and
Information Regarding Receivables..................47
SECTION 4.13. Servicer Expenses..................................48
SECTION 4.14. Appointment of Subservicer.........................48
SECTION 4.15. Obligations under Basic Documents..................48
ARTICLE V
Distributions; Statements to Certificateholders
AND NOTEHOLDERS
SECTION 5.1. Establishment of Trust Accounts....................49
SECTION 5.1-A Capitalized Interest Account.......................51
SECTION 5.2. Collections........................................52
SECTION 5.3. Application of Collections.........................53
SECTION 5.4. Deficiency Notice..................................54
SECTION 5.5. Additional Deposits................................54
SECTION 5.6. Distributions......................................54
SECTION 5.7. Pre-Funding Account................................56
SECTION 5.8. Statements to Certificateholders and
Noteholders........................................57
SECTION 5.9. Net Deposits.......................................59
SECTION 5.10. Optional Deposits by the Security
Insurer............................................59
ARTICLE 5A
E CERTIFICATE POLICY
SECTION 5A.1. Claims Under Policy................................58
SECTION 5A.2. Preference Claims; Direction of
Proceedings........................................59
SECTION 5A.3. Surrender of Policy................................60
ARTICLE VI
THE SELLER
SECTION 6.1. Representations of the Seller......................62
SECTION 6.2. Corporate Existence................................64
SECTION 6.3. Liability of Seller; Indemnities...................65
SECTION 6.4. Merger or Consolidation of, or
Assumption of the Obligations of,
Seller ......................................66
SECTION 6.5. Limitation on Liability of Seller
and Others.........................................67
SECTION 6.6. Seller May Own Certificates or Notes...............67
ARTICLE VII
THE SERVICER
SECTION 7.1. Representations of Servicer........................67
SECTION 7.2. Indemnities of Servicer............................69
SECTION 7.3. Merger or Consolidation of, or
Assumption of the Obligations
of, Servicer.......................................71
SECTION 7.4. Limitation on Liability of Servicer
and Others.........................................71
SECTION 7.5. Servicer Not To Resign.............................72
ARTICLE VIII
DEFAULT
SECTION 8.1. Servicer Default...................................73
SECTION 8.2. Appointment of Successor...........................73
SECTION 8.3. [RESERVED].........................................76
SECTION 8.4. Notification to Noteholders and
Certificateholders.................................76
SECTION 8.5. Waiver of Past Defaults............................76
ARTICLE IX
TERMINATION
SECTION 9.1. Optional Purchase of All Receivables...............76
ARTICLE X
ADMINISTRATIVE DUTIES OF THE SERVICER
SECTION 10.1. Administrative Duties..............................76
SECTION 10.2. Records ......................................79
SECTION 10.3. Additional Information to be Furnished
to the Issuer......................................81
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. Amendment..........................................81
SECTION 11.2. Protection of Title to Trust.......................83
SECTION 11.3. Notices ......................................86
SECTION 11.4. Assignment.........................................84
SECTION 11.5. Limitations on Rights of Others....................87
SECTION 11.6. Severability.......................................87
SECTION 11.7. Separate Counterparts..............................87
SECTION 11.8. Headings...........................................87
SECTION 11.9. Governing Law......................................87
SECTION 11.10. Assignment to Trustee..............................87
SECTION 11.11. Nonpetition Covenants..............................88
SECTION 11.12. Limitation of Liability of Owner
Trustee, Trustee and Indenture
Collateral Agent...................................88
SECTION 11.13. Independence of the Servicer.......................89
SECTION 11.14. No Joint Venture...................................89
SECTION 11.15. Third-Party Beneficiaries..........................89
SECTION 11.16. Disclaimer by Security Insurer.....................90
SCHEDULES
Schedule A - Schedule of Receivables
Schedule B - Location of Receivables
EXHIBITS
Exhibit A - Form of Subsequent Transfer Agreement
Exhibit B - Form of Monthly Certificateholder Statement
Exhibit C - Form of Monthly Noteholder Statement
Exhibit D - Form of Servicer's Certificate
Exhibit E - Form of Note Policy
Exhibit F - Form of Stamp
<PAGE>
SALE AND SERVICING AGREEMENT dated as of May
31, 1997, among THE MONEY STORE AUTO TRUST
1997- 2, a Delaware business trust (the "Issuer"),
TMS AUTO HOLDINGS, INC., a Delaware corporation (the
"Seller"), THE MONEY STORE AUTO FINANCE INC., a
Delaware corporation (the "Servicer"), and THE MONEY
STORE INC., a New Jersey corporation (the
"Representative").
WHEREAS the Issuer desires to purchase a portfolio of receivables arising
in connection with motor vehicle retail installment sale contracts acquired by
The Money Store Auto Finance Inc. through motor vehicle dealers;
WHEREAS the Seller has purchased such receivables from The Money Store Auto
Finance Inc. and is willing to sell such receivables to the Issuer;
WHEREAS the Issuer desires to purchase additional receivables arising in
connection with motor vehicle retail installment sale contracts to be acquired
by The Money Store Auto Finance Inc. through motor vehicle dealers;
WHEREAS the Seller has an agreement to purchase such additional receivables
from The Money Store Auto Finance Inc. and is willing to sell such receivables
to the Issuer;
WHEREAS the Servicer is willing to service all such receivables;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. Whenever used in this Agreement, the following
words and phrases shall have the following meanings:
"Accelerated Principal Distributable Amount" means, with respect to any
Distribution Date, the lesser of (i) the excess of (x) the sum of the
outstanding aggregate principal amount of the Notes and the outstanding
principal balance of the Certificates as of such Distribution Date (after giving
effect to any distribution of principal on such Distribution Date) over (y) the
sum of the Pool Balance and the Pre-Funded Amount, if any, in each case as of
the end of the preceding Monthly Period and (ii) the amount of the Available
Funds remaining after distribution of amounts payable pursuant to clauses (i)
through (vii) of Section 5.6(b) of the Agreement on such Distribution Date.
"Addition Notice" means, with respect to any transfer of Subsequent
Receivables to the Trust pursuant to Section 2.2 of the Agreement, notice of the
Seller's election to transfer Subsequent Receivables to the Trust, such notice
to designate the related Subsequent Transfer Date and the approximate principal
amount of Subsequent Receivables to be transferred on such Subsequent Transfer
Date.
"Affiliate" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. A Person shall not be deemed to be an
Affiliate of any person solely because such other Person has the contractual
right or obligation to manage such Person unless such other Person controls such
Person through equity ownership or otherwise.
"Aggregate Principal Balance" means, with respect to any date of
determination, the sum of the Principal Balances for all Receivables (other than
(i) any Receivable that became a Liquidated Receivable during the related
Monthly Period and (ii) any Receivable that was purchased or repurchased by any
Person pursuant to the Agreement during the related Monthly Period) as of the
date of determination.
"Agreement" means this Sale and Servicing Agreement, as the same may be
amended and supplemented from time to time.
"Amount Financed" means, with respect to a Receivable, the aggregate amount
advanced under such Receivable toward the purchase price of the Financed Vehicle
and any related costs, including amounts advanced in respect of accessories,
insurance premiums, service, car club and warranty contracts, other items
customarily financed as part of retail automobile installment sale contracts or
promissory notes, and related costs.
"Annual Percentage Rate" or "APR" of a Receivable means the annual
percentage rate of finance charges or service charges, as stated in the related
Contract.
"Available Funds" means, with respect to any Determination Date, the sum of
(i) the Collected Funds for such Determination Date, (ii) all Purchase Amounts
deposited in the Collection Account during the related Monthly Period, and
proceeds of any repurchase by a Dealer pursuant to Dealer Agreement, (iii) the
Monthly Capitalized Interest Amount with respect to the related Distribution
Date, (iv) following the acceleration of the Notes pursuant to Section 5.2 of
the Indenture, the amount of money or property collected pursuant to Section 5.4
of the Indenture since the preceding Determination Date by the Trustee or
Controlling Party for distribution pursuant to Section 5.6 of the Indenture, and
(v) any Insolvency Proceeds received pursuant to Section 9.1(b) hereof.
"Base Servicing Fee" means, with respect to any Monthly Period, the fee
payable to the Servicer for services rendered during such Monthly Period, which
shall be equal to one-twelfth of the Servicing Fee Rate multiplied by the Pool
Balance as of the first day of such Monthly Period.
"Basic Documents" means the Certificate of Trust, the Trust Agreement, the
Sale and Servicing Agreement, the Indenture, the Insurance Agreement, the
Depository Agreements and other documents and certificates delivered in
connection therewith.
"Business Day" means a day other than a Saturday, a Sunday or other day on
which commercial banks located in the states of California, Delaware, New Jersey
or New York are authorized or obligated to be closed.
"Capitalized Interest Account" means the account designated as such,
established and maintained pursuant to Section 5.1-A.
"Capitalized Interest Account Initial Deposit" means $286,455.74 deposited
on the Closing Date.
"Certificate" means a Trust Certificate (as defined in the Trust
Agreement).
"Certificate Balance" equals, initially, $4,500,000 and thereafter equals
the initial Certificate Balance, reduced by all amounts allocable to principal
previously distributed to Certificateholders.
"Certificate Distribution Account" has the meaning assigned to such term in
Section 5.1(a) of the Trust Agreement.
"Certificate Insured Payment" has the meaning as described in the
Certificate Policy.
"Certificate Policy" means the certificate guaranty insurance policy issued
by the Security Insurer to the Owner Trustee for the benefit of the
Certificateholders with respect to the Certificates, including any endorsements
and exhibits thereto.
"Certificate Pool Factor" as of the close of business on a Distribution
Date means a seven-digit decimal figure equal to the Certificate Balance as of
such Distribution Date after giving effect to principal distributions on such
date divided by the initial Certificate Balance.
"Certificate Rate" means 6.64% per annum.
"Certificateholder" has the meaning assigned to such term in the Trust
Agreement.
"Certificateholders' Distributable Amount" means, with respect to any
Distribution Date, the sum of the Certificate- holders' Interest Distributable
Amount and the Certificate holders' Principal Distributable Amount.
"Certificateholders' Interest Carryover Shortfall" means, with respect to
any Distribution Date, the excess of the Certificateholders' Monthly Interest
Distributable Amount for the preceding Distribution Date and any outstanding
Certificate- holders' Interest Carryover Shortfall on such preceding
Distribution Date, over the amount in respect of interest at the Certificate
Rate that was actually deposited in the Certificate Distribution Account on such
preceding Distribution Date, plus interest on such excess, to the extent
permitted by law, at the Certificate Rate from and including such preceding
Distribution Date to but excluding the current Distribution Date.
"Certificateholders' Interest Distributable Amount" means, with respect to
any Distribution Date, the sum of the Certificateholders' Monthly Interest
Distributable Amount for such Distribution Date and the Certificateholders'
Interest Carryover Shortfall for such Distribution Date.
"Certificateholders' Monthly Interest Distributable Amount" means, with
respect to any Distribution Date, interest accrued during the related Interest
Period at the Certificate Rate on the Certificate Balance immediately preceding
such Distribution Date. Interest shall be computed on the basis of a 360-day
year of twelve 30-day months for purposes of this definition.
"Certificateholders' Monthly Principal Distributable Amount" means, with
respect to any Distribution Date, the Certificateholders' Percentage of the
Principal Distributable Amount.
"Certificateholders' Percentage" means (i) for each Distribution Date prior
to the Distribution Date on which the Class A-2 Notes are paid in full, zero,
(ii) on the Distribution Date on which the Class A-2 Notes are paid in full, the
percentage equivalent of a fraction, the numerator of which is the excess, if
any, of (x) the Principal Distributable Amount for such Distribution Date over
(y) the outstanding principal amount of the Class A-2 Notes immediately prior to
such Distribution Date, and the denominator of which is the Principal
Distributable Amount for such Distribution Date, and (iii) for each Distribution
Date thereafter to and including the Distribution Date on which the Certificate
Balance is reduced to zero, 100%.
"Certificateholders' Principal Carryover Shortfall" means, with respect to
any Distribution Date, the excess of the Certificateholders' Monthly Principal
Distributable Amount and any outstanding Certificateholders' Principal Carryover
Shortfall for the preceding Distribution Date, over the amount in respect of
principal that was actually deposited in the Certificate Distribution Account on
such preceding Distribution Date.
"Certificateholders' Principal Distributable Amount" means, with respect to
any Distribution Date (other than the Final Scheduled Distribution Date for the
Certificates), the lesser of (i) the outstanding principal balance of the
Certificates on the Distribution Date prior to making any distribution thereon
and (ii) the sum of the Certificateholders' Monthly Principal Distributable
Amount for such Distribution Date and the Certificateholders' Principal
Carryover Shortfall as of the close of the preceding Distribution Date;
PROVIDED, HOWEVER, that the Certificateholders' Principal Distributable Amount
shall not exceed the Certificate Balance. In addition, on the Final Scheduled
Distribution Date for the Certificates, the Certificateholders' Principal
Distributable Amount will equal the Certificate Balance on such Distribution
Date.
"Class" means the Class A-1 Notes or the Class A-2 Notes, as the context
requires.
"Class A-1 Notes" has the meaning assigned to such term in the Indenture.
"Class A-2 Notes" has the meaning assigned to such term in the Indenture.
"Closing Date" means June 26, 1997.
"Collected Funds" means, with respect to any Determination Date, the amount
of funds in the Collection Account representing collections on the Receivables
during the related Monthly Period, including all Net Liquidation Proceeds and
proceeds of any Insurance Policies collected during the related Monthly Period
(but excluding any Purchase Amounts).
"Collection Account" means the account designated as such, established and
maintained pursuant to Section 5.1 of the Agreement.
"Computer Tape" means the computer tapes or other electronic media
furnished by TMS Auto Holdings, Inc. to the Issuer and its assigns and the
Security Insurer describing certain characteristics of the Initial Receivables
as of the Cutoff Date and of Subsequent Receivables as of the related Subsequent
Cutoff Date.
"Contract" means a motor vehicle retail installment sale contract.
"Corporate Trust Office" means (i) with respect to the Owner Trustee, the
principal corporate trust office of the Owner Trustee, which at the time of
execution of this Agreement is 1001 Jefferson Street, Suite 550, Wilmington,
Delaware 19801, Attention: Lisa Wilkins, and (ii) with respect to the Trustee
and the Indenture Collateral Agent, the principal corporate trust office of the
Trustee, which at the time of execution of this Agreement is 450 West 33rd
Street, 10th Floor, New York, New York 10001-2697, Attention: Corporate Trust
Department.
"Cram Down Loss" means, with respect to a Receivable, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the amount owed on a Receivable or otherwise modifying or restructuring
the scheduled payments to be made on a Receivable, an amount equal to (i) the
excess of the principal balance of such Receivable immediately prior to such
order over the principal balance of such Receivable as so reduced and/or (ii) if
such court shall have issued an order reducing the effective rate of interest on
such Receivable, the net present value of such reduction (using as the discount
rate the higher of the APR on such Receivable or the rate of interest, if any,
specified by the court in such order) of the scheduled payments as so modified
or restructured. A "Cram Down Loss" shall be deemed to have occurred on the date
of issuance of such order.
"Dealer" means a dealer who sold a Financed Vehicle and who originated and
assigned the respective Receivable to the Seller under an existing agreement
between such Dealer and the Seller.
"Dealer Agreement" means any agreement between a Dealer and TMS Auto
Finance relating to the acquisition of Receivables from a Dealer by TMS Auto
Finance.
"Defaulted Receivable" means a Receivable with respect to which: (i) ten
percent or more of a Scheduled Payment is 120 or more days delinquent, (ii) the
Servicer has repossessed the related Financed Vehicle (and any applicable
redemption period has expired) or (iii) such Receivable is in default and the
Servicer has determined in good faith that payments thereunder are not likely to
be resumed.
"Deficiency Claim Amount" shall have the meaning set forth in Section 5.4
of the Agreement.
"Deficiency Claim Date" means, with respect to any Distribution Date, the
fourth Business Day immediately preceding such Distribution Date.
"Deficiency Notice" shall have the meaning set forth in Section 5.4 of the
Agreement.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9-105(1)(i) of the UCC and
are susceptible of physical delivery, transfer thereof to the Trustee or
its nominee or custodian by physical delivery to the Trustee or its
nominee or custodian endorsed to, or registered in the name of, the
Trustee or its nominee or custodian or endorsed in blank, and, with
respect to a certificated security (as defined in Section 8-102 of the
UCC) transfer thereof (i) by delivery of such certificated security
endorsed to, or registered in the name of, the Trustee or its nominee or
custodian or endorsed in blank to a financial intermediary (as defined
in Section 8-313 of the UCC) and the making by such financial
intermediary of entries on its books and records identifying such
certificated securities as belonging to the Trustee or its nominee or
custodian and the sending by such financial intermediary of a
confirmation of the purchase of such certificated security by the
Trustee or its nominee or custodian, or (ii) by delivery thereof to a
"clearing corporation" (as defined in Section 8-102(3) of the UCC) and
the making by such clearing corporation of appropriate entries on its
books reducing the appropriate securities account of the transferor and
increasing the appropriate securities account of a financial
intermediary by the amount of such certificated security, the
identification by the clearing corporation of the certificated
securities for the sole and exclusive account of the financial
intermediary, the maintenance of such certificated securities by such
clearing corporation or a "custodian bank" (as defined in Section
8-102(4) of the UCC) or the nominee of either subject to the clearing
corporation's exclusive control, the sending of a confirmation by the
financial intermediary of the purchase by the Trustee or its nominee or
custodian of such securities and the making by such financial
intermediary of entries on its books and records identifying such
certificated securities as belonging to the Trustee or its nominee or
custodian (all of the foregoing, "Physical Property"), and, in any
event, any such Physical Property in registered form shall be in the
name of the Trustee or its nominee or custodian; and such additional or
alternative procedures as may hereafter become appropriate to effect the
complete transfer of ownership of any such Trust Account Property to the
Trustee or its nominee or custodian, consistent with changes in
applicable law or regulations or the interpretation thereof;
(b) with respect to any security issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by
the Federal National Mortgage Association that is a book-
entry security held through the Federal Reserve System pursuant to
Federal book-entry regulations, the following procedures, all in
accordance with applicable law, including applicable Federal regulations
and Articles 8 and 9 of the UCC: book-entry registration of such Trust
Account Property to an appropriate book-entry account maintained with a
Federal Reserve Bank by a financial intermediary which is also a
"depository" pursuant to applicable Federal regulations and issuance by
such financial intermediary of a deposit advice or other written
confirmation of such book- entry registration to the Trustee or its
nominee or custodian of the purchase by the Trustee or its nominee or
custodian of such book-entry securities; the making by such financial
intermediary of entries in its books and records identifying such
book-entry security held through the Federal Reserve System pursuant to
Federal book-entry regulations as belonging to the Trustee or its
nominee or custodian and indicating that such custodian holds such Trust
Account Property solely as agent for the Trustee or its nominee or
custodian; and such additional or alternative procedures as may
hereafter become appropriate to effect complete transfer of ownership of
any such Trust Account Property to the Trustee or its nominee or
custodian, consistent with changes in applicable law or regulations or
the interpretation thereof; and
(c) with respect to any item of Trust Account Property that is
an uncertificated security under Article 8 of the UCC and that is not
governed by clause (b) above,
registration on the books and records of the issuer thereof in the name
of the financial intermediary, the sending of a confirmation by the
financial intermediary of the purchase by the Trustee or its nominee or
custodian of such uncertificated security, the making by such financial
intermediary of entries on its books and records identifying such
uncertificated certificates as belonging to the Trustee or its nominee
or custodian.
"Depositor" shall mean the Seller in its capacity as Depositor under the
Trust Agreement.
"Depository Agreements" mean the Certificate Depository Agreement and the
Note Depository Agreement.
"Determination Date" means, with respect to any Distribution Date, the
fifth Business Day prior to the related Distribution Date.
"Distribution Amount" means, with respect to a Distribution Date, the sum
of (i) the Available Funds for the immediately preceding Determination Date,
plus (ii) the Deficiency Claim Amount, if any, received (from an Insurer
Optional Deposit or otherwise other than from draws under the Policies) by the
Trustee with respect to such Distribution Date.
"Distribution Date" means, with respect to each Monthly Period, the
twentieth day of the following calendar month, or if such day is not a Business
Day, the immediately following Business Day, commencing in July, 1997.
"Draw Date" means, with respect to any Distribution Date, the second
Business Day immediately preceding such Distribution Date.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), having corporate trust powers and
acting as trustee for funds deposited in such account, so long as any of the
securities of such depository institution have a credit rating from each Rating
Agency in one of its generic rating categories which signifies investment grade.
"Eligible Institution" means (a) the corporate trust department of the
Trustee or any other entity specified in the Agreement or (b) a depository
institution organized under the laws of the United States of America or any one
of the states thereof or the District of Columbia (or any domestic branch of a
foreign bank), which (i) has either (A) a long-term unsecured debt rating of AAA
or better by Standard & Poor's and Aaa or better by Moody's or (B) a certificate
of deposit rating of A-1+ by Standard & Poor's and P-1 or better by Moody's or
any other short-term or certificate of deposit rating acceptable to the Rating
Agencies and to the Security Insurer and (ii) whose deposits are insured by the
FDIC. If so qualified under clause (b) above, the Owner Trustee or the Trustee
may be considered an Eligible Institution.
"Eligible Investments" mean book-entry securities, negotiable instruments
or securities represented by instruments in bearer or registered form which
evidence:
(a) direct obligations of, and obligations fully
guaranteed as to timely payment by, the United States of
America;
(b) demand deposits, time deposits or certificates of
deposit of any depository institution or trust company
incorporated under the laws of the United States of America
or any state thereof or the District of Columbia (or any
domestic branch of a foreign bank) and subject to supervision and
examination by Federal or state banking or depository institution
authorities (including depository receipts issued by any such
institution or trust company as
custodian with respect to any obligation referred to in clause (a)
above or portion of such obligation for the benefit of the holders of
such depository receipts); PROVIDED, HOWEVER, that at the time of the
investment or contractual commitment to invest therein (which shall be
deemed to be made again each time funds are reinvested following each
Distribution Date), the commercial paper or other short-term senior
unsecured debt obligations (other than such obligations the rating of
which is based on the credit of a Person other than such depository
institution or trust company) of such depository institution or trust
company shall have a credit rating from Standard & Poor's of A-1+ and
from Moody's of P-1;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from Standard &
Poor's of A-1+ and from Moody's of P- 1;
(d) investments in money market funds (including funds for which
the Trustee or the Owner Trustee or any of their respective Affiliates
is investment manager or advisor) having a rating from Standard & Poor's
of AAA-m or AAAm-G and from Moody's of Aaa and having been approved by
the Security Insurer;
(e) bankers' acceptances issued by any depository
institution or trust company referred to in clause (b)
above;
(f) repurchase obligations with respect to any security that is
a direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) referred
to in clause (b) above; and
(g) any other investment which would satisfy the
Rating Agency Condition and is consistent with the ratings
of the Securities and which, so long as no Insurer Default
shall have occurred and be continuing, has been approved
by the Security Insurer.
Any of the foregoing Eligible Investments may be purchased by or through
the Owner Trustee or the Trustee or any of its Affiliates.
"FDIC" means the Federal Deposit Insurance Corporation.
"Final Scheduled Distribution Date" means with respect to (i) the Class A-1
Notes, the March 2001 Distribution Date (ii) the Class A-2 Notes, the September
2003 Distribution Date, and (iii) the Certificates, the September 2003
Distribution Date.
"Final Scheduled Maturity Date" means December 2003.
"Financed Vehicle" means an automobile, light-duty truck, van or minivan,
together with all accessions thereto, securing an Obligor's indebtedness under
the respective Receivable.
"Funding Period" means the period beginning on and including the Closing
Date and ending on the first to occur of (a) the Distribution Date on which the
amount on deposit in the Pre-Funding Account (after giving effect to any
transfers therefrom in connection with the transfer of Subsequent Receivables to
the Issuer on such Distribution Date) is less than $200,000, (b) the date on
which an Event of Default or a Servicer Default occurs, or an Event of Default
under the Indenture occurs, (c) the date on which an Insolvency Event occurs
with respect to the General Partner and (d) the close of business on the
September 1997 Distribution Date.
"General Partner" means the General Partner under the Trust Agreement.
"Indenture" means the Indenture dated as of May 31, 1997, among the Issuer,
the Indenture Collateral Agent and the Trustee, as the same may be amended and
supplemented from time to time.
"Indenture Collateral Agent" means the Person acting as Indenture
Collateral Agent under the Indenture, its successors in interest and any
successor Indenture Collateral Agent under the Indenture.
"Initial Cutoff Date" means as to any Initial Receivable, the later of May
31, 1997 and the date of origination of such Initial Receivable.
"Initial Receivables" means any Receivable conveyed to the Trust on the
Closing Date.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a petition against such Person or the entry of a decree or order for
relief by a court having jurisdiction in the premises in respect of such Person
or any substantial part of its property in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator, or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or liquidation or
such Person's affairs, and such petition, decree or order shall remain unstayed
and in effect for a period of 60 consecutive days; or (b) the commencement by
such Person of a voluntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or the
consent by such Person to the entry of an order for relief in an involuntary
case under any such law, or the consent by such Person to the appointment of or
taking possession by, a receiver, liquidator, assignee, custodian, trustee,
sequestrator, or similar official for such Person or for any substantial part of
its property, or the making by such Person of any general assignment for the
benefit of creditors, or the failure by such Person generally to pay its debts
as such debts become due, or the taking of action by such Person in furtherance
of any of the foregoing.
"Insurance Agreement" means the Insurance Agreement, dated as of May 31,
1997, among the Security Insurer, the Indenture Trustee, the Trust, the
Servicer, the Representative, the Owner Trustee and the Seller.
"Insurance Agreement Event of Default" means an "Insurance Agreement Event
of Default" as defined in the Insurance Agreement.
"Insurance Policy" means, with respect to a Receivable, any insurance
policy (including the insurance policies described in Section 4.4 of the
Agreement) benefiting the holder of the Receivable providing loss or physical
damage, credit life, credit disability, theft, mechanical breakdown or similar
coverage with respect to the Financed Vehicle or the Obligor.
"Insurer Default" means the occurrence and continuance of any of the
following events:
(a) the Security Insurer shall have failed to make a
payment required under the Note Policy or the Certificate
Policy in accordance with its respective terms;
(b) The Security Insurer shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter of the
United States Bankruptcy Code or any other similar federal or state law
relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (ii) made a general assignment for the benefit of its
creditors, or (iii) had an order for relief entered against it under the
United States Bankruptcy Code or any other similar federal or state law
relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization which is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department
of Insurance or other competent regulatory authority shall have entered
a final and nonappealable order, judgment or decree (i) appointing a
custodian, trustee, agent or receiver for the Security Insurer or for
all or any material portion of its property or (ii) authorizing the
taking of possession by a custodian, trustee, agent or receiver of the
Security Insurer (or the taking of possession of all or any material
portion of the property of the Security Insurer); provided, however,
that the Security Insurer's rights shall be immediately reinstated upon
cure of such Insurer Default.
"Insurer Optional Deposit" means, with respect to any Distribution Date, an
amount delivered by the Insurer pursuant to Section 5.10 of the Agreement, at
its sole option, to the Trustee for deposit into the Collection Account for any
of the following purposes: (i) to provide funds in respect of the payment of
fees or expenses of any provider of services to the Trust with respect to such
Distribution Date; or (ii) to include such amount as part of the Distribution
Amount for such Distribution Date to the extent that without such amount a draw
would be required to be made on a Policy.
"Interest Period" means, with respect to any Distribution Date, the period
from and including the most recent Distribution Date(or, in the case of the
first Distribution Date, from and including June 20, 1997) on which interest has
been paid to but excluding such Distribution Date.
"Interest Rate" means, with respect to (i) the Class A- 1 Notes, 6.17% per
annum, and (ii) the Class A-2 Notes, 6.495% per annum (each computed on the
basis of a 360-day year of twelve 30-day months).
"Investment Earnings" means, with respect to any Distribution Date, the
investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts and the Certificate Distribution Account.
"Issuer" means The Money Store Auto Trust 1997-2.
"Lien" means a security interest, lien, charge, pledge, equity, or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of any
act or omission by the related Obligor.
"Lien Certificate" means, with respect to a Financed Vehicle, an original
certificate of title, certificate of lien or other notification issued by the
Registrar of Titles of the applicable state to a secured party which indicates
that the lien of the secured party on the Financed Vehicle is recorded on the
original certificate of title. In any jurisdiction in which the original
certificate of title is required to be given to the Obligor, the term "Lien
Certificate" shall mean only a certificate or notification issued to a secured
party.
"Liquidated Receivable" means, with respect to any Determination Date, a
Receivable as to which, as of the last day of the related Monthly Period, (i) 90
days have elapsed since the Servicer repossessed the Financed Vehicle, (ii) the
Servicer has determined in good faith that all amounts it expects to recover
have been received, (iii) 10% or more of a Scheduled Payment shall have become
150 or more days delinquent, or (iv) the Financed Vehicle has been sold and the
proceeds received.
"Mandatory Redemption Date" means the Distribution Date in September 1997.
"Monthly Capitalized Interest Amount" means in the case of the July, August
and September 1997 Distribution Dates, an amount equal to the product of (x) a
fraction the numerator of which is one and the denominator of which is twelve,
(y) the weighted average of each Interest Rate and the Certificate Rate, less
2.5% and (z) the difference between the sum of the aggregate principal amount of
the Notes and the Certificate Balance immediately prior to the applicable
Distribution Date and the Pool Balance as of the last day of the second
preceding Monthly Period, or in the case of the July Distribution Date, as of
the Closing Date.
"Monthly Period" means with respect to each Distribution Date, the calendar
month preceding the month in which such Distribution Date occurs.
"Moody's" means Moody's Investors Service, Inc., or its successor.
"Net Liquidation Proceeds" means as to any Liquidated Receivable, all
amounts realized with respect to such Receivable (other than amounts paid
pursuant to this Agreement and drawings under the Policy) net of (i) reasonable
expenses incurred by the Servicer in connection with the collection of such
Receivable and the repossession and disposition of the Financed Vehicle and (ii)
amounts that are required to be refunded to the Obligor on such Receivable;
PROVIDED, HOWEVER, that the Net Liquidation Proceeds with respect to any
Receivable shall in no event be less than zero.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.1 of the Agreement.
"Note Insured Payment" has the meaning as defined in the Note Policy.
"Noteholders' Distributable Amount" means, with respect to any Distribution
Date, the sum of the Noteholders' Principal Distributable Amount and the
Noteholders' Interest Distributable Amount.
"Noteholders' Interest Carryover Shortfall" means, with respect to any
Distribution Date, the excess of the Noteholders' Monthly Interest Distributable
Amount for the preceding Distribution Date and any outstanding Noteholders'
Interest Carryover Shortfall on such preceding Distribution Date, over the
amount in respect of interest that was actually deposited in the Note
Distribution Account on such preceding Distribution Date, plus interest on the
amount of interest due but not paid to Noteholders on the preceding Distribution
Date, to the extent permitted by law, at the respective Interest Rate borne by
each Class of Notes from such preceding Distribution Date to but excluding the
current Distribution Date.
"Noteholders' Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Monthly Interest Distributable
Amount for such Distribution Date and the Noteholders' Interest Carryover
Shortfall for such Distribution Date. Interest on each Class of Notes shall be
computed on the basis of a 360-day year of twelve 30-day months.
"Noteholders' Monthly Interest Distributable Amount" means, with respect to
any Distribution Date, the product of (i) one-twelfth of the Interest Rate for
such Class (or, in the case of the first Distribution Date, the Interest Rate
for such Class multiplied by a fraction, the numerator of which is the number of
days elapsed from and including June 20, 1997 to but excluding such Distribution
Date and the denominator of which is 360) and (ii) the outstanding principal
amount of the Notes of such Class immediately preceding such Distribution Date.
"Noteholders' Monthly Principal Distributable Amount" means, with respect
to any Distribution Date, the Noteholders' Percentage of the Principal
Distributable Amount.
"Noteholders' Percentage" means with respect to any Determination Date (i)
relating to a Distribution Date prior to the Distribution Date on which the
principal amount of the Class A-2 Notes is reduced to zero, 100%; (ii) relating
to the Distribution Date on which the principal amount of the Class A-2 Notes is
reduced to zero, the percentage equivalent of a fraction, the numerator of which
is the principal amount of the Class A-2 Notes immediately prior to such
Distribution Date, and the denominator of which is the Principal Distributable
Amount; and (iii) relating to any other Distribution Date, 0%.
"Noteholders' Principal Carryover Shortfall" means, as of the close of any
Distribution Date, the excess of the Noteholders' Monthly Principal
Distributable Amount and any outstanding Noteholders' Principal Carryover
Shortfall for the preceding Distribution Date over the amount in respect of
principal that was actually deposited in the Note Distribution Account on such
preceding Distribution Date.
"Noteholders' Principal Distributable Amount" means, with respect to any
Distribution Date, (other than the Final Scheduled Distribution Date for any
Class of Notes), the lesser of (i) the outstanding principal balance on the
Notes on such Distribution Date prior to making any distribution thereon and
(ii) the sum of the Noteholders' Monthly Principal Distributable Amount for such
Distribution Date and the Noteholders' Principal Carryover Shortfall as of the
close of the preceding Distribution Date. The Noteholders' Principal
Distributable Amount on the Final Scheduled Distribution Date for any Class of
Notes will equal the sum of (i) the Noteholders' Monthly Principal Distributable
Amount for such Distribution Date, (ii) the Noteholders' Principal Carryover
Shortfall as of the close of the preceding Distribution Date, and (iii) the
excess of the outstanding principal amount of such Class of Notes, if any, over
the amounts described in clauses (i) and (ii).
"Note Policy" means the note guaranty insurance policy issued by the
Security Insurer to the Trustee for the benefit of the Noteholders with respect
to the Notes, including any endorsements thereto, in the form of Exhibit E to
the Indenture.
"Note Pool Factor" for each Class of Notes as of the close of business on a
Distribution Date means a seven-digit decimal figure equal to the outstanding
principal amount of such Class of Notes as of such Distribution Date after
giving effect to principal distributions on such date divided by the original
outstanding principal amount of such Class of Notes.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
Financed Vehicle and any other Person who owes payments under the Receivable.
"Officer's Certificate" means a certificate signed by the (a) chairman of
the board, the president, any executive vice president or any vice president and
(b) any treasurer, assistant treasurer, secretary or assistant secretary of the
Representative, the Seller or the Servicer, as appropriate.
"Opinion of Counsel" means one or more written opinions of counsel who may
be an employee of or counsel to the Representatives, the Seller or the Servicer,
which counsel shall be acceptable to the Trustee, the Owner Trustee, the
Security Insurer or the Rating Agencies, as applicable, and which shall be
addressed to the Security Insurer.
"Original Pool Balance" means the sum, as of any date, of the Pool Balance
as of the Initial Cutoff Date, plus the aggregate Principal Balance of the
Subsequent Receivables, if any, sold to the Trust, as of their respective
Subsequent Cutoff Dates.
"Owner Trust Estate" has the meaning assigned to such term in the Trust
Agreement.
"Owner Trustee" means Bankers Trust (Delaware), not in its individual
capacity but solely as Owner Trustee under the Trust Agreement, its successors
in interest or any successor Owner Trustee under the Trust Agreement.
"Parity Date" means the point in time at which the sum of the aggregate
outstanding principal amount of the Notes and the outstanding principal balance
of the Certificates is equal to the sum of the Pool Balance and the Pre-Funded
Amount.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Physical Property" has the meaning assigned to such term in the definition
of "Delivery" above.
"Policies" means the Certificate Policy and the Note Policy.
"Pool Balance" means, as of any date of determination, the aggregate
Principal Balance of the Receivables (excluding Purchased Receivables and
Liquidated Receivables).
"Precomputed Receivable" means any Receivable under which the portion of a
payment allocable to interest and the portion allocable to principal is
determined in accordance with the Rule of 78s Method.
"Pre-Funded Amount" means, with respect to any Distribution Date, the
amount on deposit in the Pre-Funding Account, (exclusive of Pre-Funding
Earnings) which initially shall be $30,419,091.02.
"Pre-Funding Account" has the meaning specified in Section 5.1(a)(iii).
"Pre-Funding Earnings" means any investment earnings (net of losses) on
amounts on deposit in the Pre-Funding Account.
"Prepayment Amount" means, as of the Distribution Date on or immediately
following the last day of the Funding Period, after giving effect to any
transfer of Subsequent Receivables on such date, an amount equal to the
Pre-Funded Amount on deposit in the Pre-Funding Account as of such Distribution
Date.
"Principal Balance" means, with respect to any Receivable, as of any date,
the Amount Financed minus (i) that portion of all amounts received on or prior
to such date and allocable to principal in accordance with (x) in the case of
Simple Interest Receivables, the terms of the Receivable and (y) in the case of
Precomputed Receivables, the actuarial method, and (ii) any Cram Down Loss in
respect of such Receivable.
"Principal Carryover Shortfall" means, as of the close of business on any
Distribution Date, the excess of the Principal Distributable Amount plus any
outstanding Principal Carryover Shortfall from the preceding Distribution Date
over the amount of principal deposited in the Note Distribution Account and/or
the Certificate Distribution Account with respect to such current Distribution
Date.
"Principal Distributable Amount" means, with respect to any Distribution
Date, without duplication, the sum of (i) the principal portion (calculated in
the case of Precomputed Receivables on the basis of the actuarial method and in
the case of Simple Interest Receivables, calculated on the basis of the Simple
Interest Method) of all Collected Funds received during the immediately
preceding Monthly Period (other than Liquidated Receivables and Purchased
Receivables) including the principal portion of all prepayments, (ii) the
Principal Balance of all Receivables that became Liquidated Receivables during
the related Monthly Period (other than Purchased Receivables), (iii) (without
duplication of amounts in clause (ii) hereof) the principal portion of the
Purchase Amounts received with respect to all Receivables that became Purchased
Receivables during the related Monthly Period, (iv) in the sole discretion of
the Security Insurer, the Principal Balance of all the Receivables that were
required to be purchased pursuant to Sections 3.2 and 4.7, during such Monthly
Period but were not purchased, (v) the aggregate amount of Cram Down Losses that
shall have occurred during the related Monthly Period; and (vi) following the
acceleration of the Notes pursuant to Section 5.2 of the Indenture, the amount
of money or property collected pursuant to Section 5.4 of the Indenture since
the preceding Determination Date by the Trustee or Controlling Party for
distribution pursuant to Section 5.6 of the Indenture.
"Purchase Agreement" means the Purchase Agreement between the Seller and
TMS Auto Finance, dated as of May 31, 1997, pursuant to which the Seller
acquired the Initial Receivables, as such Agreement may be amended from time to
time.
"Purchase Amount" means, with respect to a Receivable, the Principal
Balance and all accrued and unpaid interest on the Principal Balance of such
Receivable (including one month's interest thereon, in the month of payment, at
the APR less, so long as TMS Auto Finance is the Servicer, the Servicing Fee),
after giving effect to the receipt of any moneys collected (from whatever
source) on such Receivable, if any.
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Monthly Period by the Servicer or the
Representative pursuant to Section 4.7 of the Agreement or repurchased by the
Seller, TMS Auto Finance or the Representative pursuant to Section 3.2 of the
Agreement.
"Rating Agency" means Moody's and Standard & Poor's. If no such
organization or successor maintains a rating on the Securities, "Rating Agency"
shall be a nationally recognized statistical rating organization or other
comparable Person designated by the Seller and acceptable to the Security
Insurer (so long as an Insurer Default shall not have occurred and be
continuing), notice of which designation shall be given to the Trustee, the
Owner Trustee, the Security Insurer and the Servicer.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as shall be
acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Seller, the Servicer, the Security
Insurer, the Owner Trustee and the Trustee in writing that such action will not
result in a reduction or withdrawal of the then current rating of any Class of
Notes or the Certificates.
"Realized Losses" means, with respect to any Receivable that becomes a
Liquidated Receivable, the excess of the Principal Balance of such Liquidated
Receivable over Net Liquidation Proceeds to the extent allocable to principal.
"Receivable" means any Contract listed on Schedule A, as such Schedule
shall be amended to reflect the transfer of Subsequent Receivables to the Trust
(which Schedule may be in the form of microfiche).
"Receivable Files" means the documents specified in Section 3.3.
"Record Date" with respect to each Distribution Date means the day
immediately preceding such Distribution Date, unless otherwise specified in the
Agreement.
"Registrar of Titles" means, with respect to any state, the governmental
agency or body responsible for the registration of, and the issuance of
certificates of title relating to, motor vehicles and liens thereon.
"Rule of 78s Method" means the method under which a portion of a payment
allocated to earned interest and the portion allocable to principal is
determined according to the sum of the month's digits or any equivalent method
commonly referred to as the "Rule of 78s."
"Rule of 78s Receivable" means a Receivable which by its terms calculates
interest and principal with respect to each scheduled payment in accordance with
the Rule of 78s method.
"Scheduled Payment" on a Precomputed Receivable means that portion of the
payment required to be made by the Obligor during the respective Monthly Period
sufficient to amortize the Principal Balance thereof under the actuarial method
over the term of the Receivable and to provide interest at the APR.
"Security Insurer" means MBIA Insurance Corporation, a stock insurance
company incorporated under the laws of the State of New York, or any successor
thereto, as issuer of the Policies.
"Seller" means TMS Auto Holdings, Inc., a Delaware corporation, and its
successors in interest to the extent permitted hereunder.
"Service Contract" means, with respect to a Financed Vehicle, the
agreement, if any, financed under the related Receivable that provides for the
repair of such Financed Vehicle.
"Servicer" means The Money Store Auto Finance Inc., as the servicer of the
Receivables, and each successor Servicer pursuant to Section 7.3 or 8.2 of the
Agreement.
"Servicer Default" means an event specified in Section 8.1 of the
Agreement.
"Servicer's Certificate" means an Officer's Certificate of the Servicer
delivered pursuant to Section 4.9 of the Agreement, substantially in the form of
Exhibit D to the Agreement.
"Servicing Fee" has the meaning specified in Section 4.8 of the Agreement.
"Servicing Fee Rate" means 1.5% per annum.
"Simple Interest Method" means the method of allocating a fixed level
payment to principal and interest, pursuant to which the portion of such payment
that is allocated to interest is equal to the product of the fixed rate of
interest multiplied by the unpaid principal balance multiplied by the period of
time elapsed since the preceding payment of interest was made (in some states
assuming 30 day months), divided by the actual number of days in a year (360
days in states which assume 30 day months) and the remainder of such payment is
allocable to principal.
"Simple Interest Receivable" means any Receivable under which the portion
of a payment allocable to interest and the portion allocable to principal is
determined in accordance with the Simple Interest Method.
"Standard & Poor's" means Standard & Poor's Ratings Services, or its
successor.
"Subsequent Cutoff Date" means (i) the last day of the month preceding the
month in which particular Subsequent Receivables are conveyed to the Trust
pursuant to this Agreement or (ii) if any such Subsequent Receivable is
originated in the month of the related Subsequent Transfer Date, the date of
origination.
"Subsequent Purchase Agreement" means an agreement by and between the
Seller and TMS Auto Finance pursuant to which the Seller will acquire Subsequent
Receivables.
"Subsequent Receivables" means the Receivables transferred to the Issuer
pursuant to Section 2.2 of the Agreement, which shall be listed on Schedule A to
the related Subsequent Transfer Agreement.
"Subsequent Transfer Agreement" has the meaning assigned thereto in Section
2.2(b) of the Agreement.
"Subsequent Transfer Date" means, with respect to Subsequent Receivables,
any date, occurring not more frequently than once a month, during the Funding
Period on which Subsequent Receivables are to be transferred to the Trust
pursuant to this Agreement, and a Subsequent Transfer Agreement is executed and
delivered to the Trust.
"Supplemental Servicing Fee" means charges collected (from whatever source)
on the Receivables during the related Monthly Period including, in the case of a
Precomputed Receivable that is prepaid in full, the difference between the
Principal Balance of such Receivable (plus accrued interest to the date of
prepayment) and the principal balance of such Receivable computed according to
the Rule of 78s, and other late fees, prepayment fees, administrative fees and
expenses or similar charges allowed by applicable law with respect to
Receivables, plus reinvestment proceeds on any payments received in respect of
Receivables during the related Monthly Period.
"TMS Auto Finance" means The Money Store Auto Finance Inc., a Delaware
corporation.
"Trust" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
"Trust Accounts" has the meaning assigned thereto in Section 5.1 of the
Agreement.
"Trust Agreement" means the Trust Agreement dated as of May 31, 1997,
between the Seller and the Owner Trustee, as the same may be amended and
supplemented from time to time.
"Trust Officer" means, (i) in the case of the Trustee, the chairman or
vice-chairman of the board of directors, the chairman or vice-chairman of the
executive committee of the board of directors, the president, any vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller and any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject, and (ii) in the case of the Owner Trustee, any officer in
the corporate trust office of the Owner Trustee with direct responsibility for
the administration of this Agreement or any of the Basic Documents on behalf of
the Owner Trustee.
"Trust Property" has the meaning assigned thereto in Section 2.1 of the
Agreement.
"Trustee" means the Person acting as Trustee under the Indenture, its
successors in interest and any successor trustee under the Indenture.
"UCC" means the Uniform Commercial Code as in effect in the State of New
York on the date of the Agreement.
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS
(a) Capitalized terms used herein and not otherwise defined herein have the
meanings assigned to them in the Indenture, or, if not defined therein, in the
Trust Agreement.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any instrument governed hereby and in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement, in any instrument governed hereby and in any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms not defined in this Agreement or in any such instrument,
certificate or other document, and accounting terms partly defined in this
Agreement or in any such instrument, certificate or other document to the extent
not defined, shall have the respective meanings given to them under generally
accepted accounting principles as in effect on the date of this Agreement or any
such instrument, certificate or other document, as applicable. To the extent
that the definitions of accounting terms in this Agreement or in any such
instrument, certificate or other document are inconsistent with the meanings of
such terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such instrument, certificate or other
document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Section, Schedule and Exhibit
references contained in this Agreement are references to Sections, Schedules and
Exhibits in or to this Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns. (f)
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1 CONVEYANCE OF INITIAL RECEIVABLES. In consideration of the
Issuer's delivery to or upon the order of the Seller on the Closing Date of the
net proceeds from the sale of the Notes and the Certificates and the other
amounts to be distributed from time to time to the Seller in accordance with the
terms of this Agreement, the Seller does hereby sell, transfer, assign, set over
and otherwise convey to the Issuer, without recourse (subject to the obligations
set forth herein), all right, title and interest of the Seller in and to:
(a) the Initial Receivables, and all moneys received
thereon after the Initial Cutoff Date;
(b) an assignment of the security interests in the
Financed Vehicles granted by Obligors pursuant to the
Initial Receivables and any other interest of the Seller in
such Financed Vehicles;
(c) any proceeds with respect to the Initial
Receivables from claims on any physical damage, credit life
or disability insurance policies covering Financed
Vehicles or Obligors and any proceeds from the liquidation
of the Initial Receivables;
(d) any proceeds from any Initial Receivable
repurchased by a Dealer, pursuant to a Dealer Agreement, as
a result of a breach of representation or warranty in the
related Dealer Agreement;
(e) all rights under any Service Contracts on the
related Financed Vehicles;
(f) the related Receivables Files;
(g) all of the Seller's right, title and interest in its rights
and benefits, but none of its obligations or burdens, under the Purchase
Agreement, including the Seller's rights under the Purchase Agreement,
and the delivery requirements, the representations and warranties and
the cure and repurchase obligations of TMS Auto Finance
under the Purchase Agreement; and
(h) the proceeds of any and all of the foregoing (the
items specified in clauses (a) through (h) are referred to
herein as the "Trust Property").
It is the intention of the Seller that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Receivables and
other Trust Property from the Seller to the Trust and the beneficial interest in
and title to the Receivables and the other Trust Property shall not be part of
the Seller's estate in the event of the filing of a bankruptcy petition by or
against the Seller under any bankruptcy law. In the event that, notwithstanding
the intent of the Seller, the transfer and assignment contemplated hereby is
held not to be a sale, this Agreement shall constitute a grant of a security
interest in the property referred to in this Section 2.1 for the benefit of the
Noteholders, the Certificateholders and the Security Insurer.
SECTION 2.2 CONVEYANCE OF SUBSEQUENT RECEIVABLES. (a) Subject to the
conditions set forth in paragraph (b) below, in consideration of the Issuer's
delivery on each related Subsequent Transfer Date to or upon the order of the
Seller of the amount described in Section 5.7(a) to be delivered to the Seller,
the Seller does hereby sell, transfer, assign, set over and otherwise convey to
the Issuer without recourse (subject to the obligations set forth herein), all
right, title and interest of the Seller in and to:
(i) the Subsequent Receivables listed on Schedule A
to the related Subsequent Transfer Agreement;
(ii) the security interests in the Financed Vehicles
granted by Obligors pursuant to such Subsequent Receivables
and any other interest of the Seller in such Financed
Vehicles;
(iii) any proceeds with respect to such Subsequent
Receivables from claims on any physical damage, credit life
or disability insurance policies covering the related Financed Vehicles
or Obligors and any proceeds from the liquidation of such Subsequent
Receivables;
(iv) any proceeds from any Subsequent Receivable
repurchased by a Dealer, pursuant to a Dealer Agreement, as
a result of a breach of representation or warranty in the
related Dealer Agreement;
(v) all rights under any Service Contracts on the
related Financed Vehicles:
(vi) the related Receivables Files;
(vii) all of the Seller's right, title and interest in its rights and
benefits, but none of its obligations or burdens, under each of the
Subsequent Purchase Agreements, including the Seller's rights under each
of the Subsequent Purchase Agreements, and the delivery requirements,
representations and warranties and the cure and repurchase obligations
of TMS Auto Finance under each of the Subsequent Purchase Agreements, on
or after the related Subsequent Cutoff Date; and
(viii) the proceeds of any and all of the foregoing.
(b) The Seller shall transfer to the Issuer the Subsequent Receivables and
the other property and rights related thereto described in paragraph (a) above
only upon the satisfaction of each of the following conditions on or prior to
the related Subsequent Transfer Date:
(i) except with respect to the first Subsequent Transfer Date,
the Seller shall have provided the Trustee, the Owner Trustee, the
Security Insurer and the Rating Agencies with an Addition Notice not
later than five days prior to such Subsequent Transfer Date and shall
have provided any information reasonably requested by any of the
foregoing with respect to the Subsequent Receivables;
(ii) the Seller shall have delivered to the Owner Trustee, the
Security Insurer and the Trustee a duly executed Subsequent Transfer
Agreement which shall include supplements to Schedule A, listing the
Subsequent Receivables;
(iii) the Seller shall, to the extent required by Section 5.2, have
deposited in the Collection Account all collections in respect of the
Subsequent Receivables;
(iv) as of each Subsequent Transfer Date, (A) the Seller shall not
be insolvent and shall not become insolvent as a result of the transfer
of Subsequent Receivables on such Subsequent Transfer Date, (B) the
Seller shall not intend to incur or believe that it shall incur debts
that would be beyond its ability to pay as such debts mature, (C) such
transfer shall not have been made with actual intent to hinder, delay or
defraud any Person and (D) the assets of the Seller shall not constitute
unreasonably small capital to carry out its business as conducted;
(v) the Funding Period shall not have terminated;
(vi) after giving effect to any transfer of Subsequent Receivables on
a Subsequent Transfer Date, the Receivables transferred to the Trust
pursuant hereto shall meet the following criteria (based on the
characteristics of the Initial Receivables on the Initial Cutoff Date
and the Subsequent Receivables on the related Subsequent Cutoff Dates):
(i) the weighted average APR of the Receivables transferred to the
Trustee shall not be less than approximately 19.40%; (ii) the weighted
average remaining term of the Receivables transferred to the Trust shall
not be greater than approximately 56 months; (iii) not more than
approximately 40% of the Aggregate Principal Balance of the Receivables
shall consist of Obligors whose mailing
addresses are in California; (iv) no more than 15% of the
Receivables shall have a remaining term to maturity of more
than 60 months and no Receivable shall have an original term to
maturity of more than 74 months and (v) not more than 20% of the
Aggregate Principal Balance of the Receivables shall have Obligors whose
mailing addresses are in any one state other than California unless an
Opinion of Counsel acceptable to the Rating Agencies and the Security
Insurer with respect to the security interest in the related Financed
Vehicles is furnished by the Seller on or prior to such Subsequent
Transfer Date.
(vii) each of the representations and warranties made by the Seller
pursuant to Section 3.1 with respect to the Subsequent Receivables to be
transferred on such Subsequent
Transfer Date shall be true and correct as of the related Subsequent
Transfer Date, and the Seller shall have performed all obligations to be
performed by it hereunder on or prior to such Subsequent Transfer Date;
(viii) the Seller shall, at its own expense, on or prior to the
Subsequent Transfer Date indicate in its computer files that the
Subsequent Receivables identified in the Subsequent Transfer Agreement
have been sold to the Trust pursuant to this Agreement;
(ix) the Seller shall have taken any action required
to maintain the first perfected ownership interest of the
Trust in the Owner Trust Estate and the first perfected security
interest of the Indenture Collateral Agent in the Collateral;
(x) no selection procedures adverse to the interests of the
Noteholders, the Certificateholders or the Security Insurer shall have
been utilized in selecting the Subsequent Receivables;
(xi) the addition of any such Subsequent Receivables
shall not result in a material adverse tax consequence to
the Trust, the Noteholders, the Certificateholders or the
Security Insurer;
(xii) the Seller shall have delivered (A) to the Rating Agencies and
the Security Insurer an Opinion of Counsel with respect to the transfer
of such Subsequent Receivables substantially in the form of the Opinion
of Counsel delivered to the Rating Agencies and the Security Insurer on
the Closing Date and any other opinions so required by the Security
Insurer, including, without limitation, an Opinion of Counsel to the
effect that in a bankruptcy of the Representative a court would not
consolidate the assets of the Seller with those of the Representative
and (B) to the Trustee the Opinion of Counsel required by Section
11.2(i)(1);
(xiii) each Rating Agency shall have confirmed that the rating on the
Notes and the Certificates shall not be withdrawn or reduced as a result
of the transfer of such Subsequent Receivables to the Trust;
(xiv) the Security Insurer (so long as no Insurer Default shall have
occurred and be continuing), in its absolute and sole discretion, shall
have approved in writing the transfer of such Subsequent Receivables to
the Trust; and
(xv) the Seller shall have delivered to the Security
Insurer and the Trustee an Officers' Certificate confirming
the satisfaction of each condition precedent specified in
this paragraph (b).
The Seller and the Representative jointly and severally covenant that in the
event any of the foregoing conditions precedent are not satisfied with respect
to any Subsequent Receivable on the date required as specified above, the Seller
will immediately repurchase such Subsequent Receivable from the Trust, at a
price equal to the Purchase Amount thereof, in the manner specified in Section
4.7.
ARTICLE III
THE RECEIVABLES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF SELLER. The Representative
and the Seller, jointly and severally, make the following representations and
warranties as to the Receivables on which the Issuer is deemed to have relied in
acquiring the Receivables and upon which the Security Insurer shall be deemed to
rely in issuing the Policies. Such representations and warranties speak as of
the execution and delivery of this Agreement and as of the Closing Date in the
case of the Initial Receivables, and as of the related Subsequent Transfer Date
in case of the Subsequent Receivables, but shall survive the sale, transfer and
assignment of the Receivables to the Issuer and the pledge thereof to the
Trustee pursuant to the Indenture.
(a) TITLE. It is the intention of the Seller that the transfer and
assignment herein contemplated constitute a sale of the Receivables from the
Seller to the Trust and that the beneficial interest in and title to such
Receivables not be part of the debtor's estate in the event of the filing of a
petition for receivership by or against the Seller under any bankruptcy law.
Immediately prior to the transfer and assignment herein contemplated, the Seller
had good and marketable title to each Receivable, free and clear of all Liens
and, immediately upon the transfer thereof, the Trust shall have good and
marketable title to each such Receivable, free and clear of all Liens; and the
transfer of the Receivables to the Trust has been perfected under the UCC. No
Dealer or any other Person has any right to receive proceeds of any Receivables.
(b) ALL FILINGS MADE. All filings (including, without limitation, UCC
filings) necessary in any jurisdiction to give the Trust a first priority
perfected ownership interest in the Receivables, and to give the Trustee a first
priority perfected security interest therein, shall have been made.
(c) CHARACTERISTICS OF RECEIVABLES. Each Receivable (i) shall have been
originated in the United States of America by a Dealer in connection with the
retail sale of a Financed Vehicle in the ordinary course of such Dealer's
business, shall have been fully and properly executed by the parties thereto,
shall have been purchased by the Seller from TMS Auto Finance which in turn
shall have purchased such Receivable from such Dealer under an existing dealer
agreement with TMS Auto Finance and shall have been validly assigned by TMS Auto
Finance to the Seller in accordance with its terms, (ii) shall have created or
shall create a valid, subsisting and enforceable first priority security
interest in favor of TMS Auto Finance in the Financed Vehicle, which security
interest has been assigned by TMS Auto Finance to the Seller, which in turn
shall be assignable by the Seller to the Trust, (iii) shall contain customary
and enforceable provisions such that the rights and remedies of the holder
thereof shall be adequate for realization against the collateral of the benefits
of the security, (iv) shall provide for level monthly payments (provided that
the payment in the first or last month in the life of the Receivable may be
minimally different from the level payment) that fully amortize the Amount
Financed by maturity, (v) in the case of a Precomputed Receivable, shall provide
for, in the event that such Contract is prepaid, a prepayment that fully pays
the Principal Balance and includes a full months interest to the date of payment
in the month of prepayment at the Annual Percentage Rate, and (vi) has not been
amended or collections with respect to which have been waived, other than as
evidenced in the Receivable File relating thereto.
(d) SCHEDULE OF RECEIVABLES. The information set forth in Schedule A to
this Agreement is true and correct in all material respects as of the close of
business on the Initial Cutoff Date or, with respect to any Subsequent
Receivables, as of the close of business on the related Subsequent Cutoff Date,
and no selection procedures believed by the Seller to be adverse to the
Noteholders, the Certificateholders or the Security Insurer were utilized in
selecting the Receivables. The Computer Tape regarding the Receivables is true
and correct in all material respects as of the Initial Cutoff Date and will be
true and correct as of each Subsequent Cutoff Date.
(e) COMPLIANCE WITH LAW. Each Initial Receivable complied at the time it
was originated or made and complies at the execution of this Agreement or, with
respect to any Subsequent Receivables conveyed on a Subsequent Transfer Date,
such Subsequent Receivables shall comply in all material respects with all
requirements of applicable Federal, state and local laws and regulations
thereunder, including, without limitation, usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Magnuson-Moss Warranty Act, the Rees-Levering Act, the
Federal Reserve Board's Regulations B and Z, state adaptations of the National
Consumer Act and other consumer credit laws and equal credit opportunity and
disclosure laws.
(f) BINDING OBLIGATION. Each Receivable represents the legal, valid and
binding payment obligation in writing of the Obligor thereunder, enforceable by
the holder thereof in accordance with its terms except as such enforceability
may be limited by applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws now or hereafter in effect related
to or affecting creditors' rights generally and subject to general principles of
equity (whether applied in a proceeding at law or in equity); and all parties to
each Receivable had full legal capacity to execute and deliver such Receivable
and all other documents related thereto and to grant the security interest
purported to be granted thereby.
(g) NO GOVERNMENT OBLIGOR. None of the Receivables are due from the United
States of America or any State or from any agency, department or instrumentality
of the United States of America or any state.
(h) SECURITY INTEREST IN FINANCED VEHICLE. Immediately prior to the sale,
assignment and transfer thereof to the Trust, each Receivable is secured by a
validly perfected first priority security interest in the Financed Vehicle in
favor of TMS Auto Finance as secured party or all necessary and appropriate
actions have been commenced that would result in the valid perfection of a first
priority security interest in the Financed Vehicle in favor of TMS Auto Finance
as secured party. Immediately after the sale, assignment and transfer thereof to
the Trust, although the Lien Certificate will not indicate the Trust or Owner
Trustee as secured party, each Receivable will be secured by an enforceable and
perfected security interest in the Financed Vehicle in favor of the Trust as
secured party for the benefit of the Noteholders, the Certificateholders and the
Security Insurer, which security interest is prior to all other Liens in such
Financed Vehicle.
(i) RECEIVABLES IN FORCE. No Receivable has been satisfied, subordinated or
rescinded, nor has any Financed Vehicle been released from the Lien granted by
the related Receivable in whole or in part unless another vehicle has been
substituted as collateral securing the Receivable without any other modification
to such Receivable.
(j) NO WAIVER. No provision of a Receivable has been waived except as
reflected in the Receivable File relating to such Receivable.
(k) NO DEFENSES. No right of rescission, setoff, counterclaim or defense
has been asserted or threatened with respect to any Receivable.
(l) NO LIENS. There are no Liens or claims, including Liens for work,
labor, materials or unpaid state or federal taxes relating to any Financed
Vehicle securing the related Receivable, that are or may be prior to or equal to
the Lien granted by such Receivable.
(m) NO DEFAULT. No Initial Receivable has a payment that is more than 30
days delinquent as of the Initial Cutoff Date or, with respect to any Subsequent
Receivables, of not more than 30 days delinquent as of the related Subsequent
Cutoff Date and, except as permitted in this paragraph, no default, breach,
violation or event (in any such case) permitting acceleration under the terms of
any Receivable has occurred; and no continuing condition that with notice or the
lapse of time would constitute a default, breach, violation or event (in any
such case) permitting acceleration under the terms of any Receivable shall have
arisen as of the Cutoff Date; and the Seller has not waived and shall not waive
any of the foregoing. For purposes of this clause (m), a Receivable is
considered 30 days delinquent as of the end of the month following the date on
which a second consecutive Scheduled Payment has not been made.
(n) NO BANKRUPTCIES. No Obligor on any Receivable was the subject of a
bankruptcy proceeding commenced following the execution of the related Contract.
(o) NO REPOSSESSIONS. As of the Initial Cutoff Date, no Financed Vehicle
securing any Receivable is in repossession status and, as of the related
Subsequent Cutoff Date, no Financed Vehicle securing any Subsequent Receivable
will be in repossession status.
(p) ADVERSE SELECTION. No selection procedures adverse to the Noteholders,
the Certificateholders or the Security Insurer were utilized in selecting the
Receivables from those owned by the Servicer which met the selection criteria
contained in this Agreement.
(q) CHATTEL PAPER. Each Receivable constitutes "chattel paper" as defined
in the UCC.
(r) INSURANCE. The Seller, in accordance with its customary procedures, has
determined that the Obligor, at the time the Receivable was originated, obtained
physical damage insurance covering the Financed Vehicle and under the terms of
the Receivable the Obligor is required to maintain such insurance.
(s) LAWFUL ASSIGNMENT. No Receivable was originated in, as of the Initial
Cutoff Date or, with respect to any Subsequent Receivables, as of the related
Subsequent Cutoff Date, is subject to the laws of, any jurisdiction under which
the sale, transfer and assignment of such Receivable or this Agreement is
unlawful, void or voidable.
(t) NO INSURANCE PREMIUMS. No portion of the Principal Balance of any
Receivable includes amounts attributable to the payment of any physical damage
or theft insurance premium.
(u) ONE ORIGINAL. There is only one original executed copy of each
Receivable.
(v) LOCATION OF RECEIVABLE FILES. The Receivable Files shall be kept at one
or more of the locations listed in Schedule B and each item required to be in a
Receivable File is in such Receivable File.
(w) COMPUTER RECORDS. As of the Closing Date, the accounting and computer
records relating to the Initial Receivables of the Seller have been marked to
show the absolute ownership by the Owner Trustee on behalf of the Trust of the
Initial Receivables, and, as of any Subsequent Transfer Date the accounting and
computer records relating to the Subsequent Receivables will be marked to show
the absolute ownership by the Owner Trustee on behalf of the Trust of the
Subsequent Receivables.
(x) TAXES. To the best knowledge of the Representative and the Seller,
there are no state or local taxing jurisdictions which have asserted that
nonresident holders of certificates in, or notes issued by, a trust which holds
assets similar to the assets to be held by the Trust are subject to the
jurisdiction's income or other taxes solely by reason of the location in the
jurisdiction of the Owner Trustee, the Seller, the Servicer, the Representative,
the obligors on or the assets securing the Receivables held by the Trust, or the
issuer of a financial guaranty insurance policy.
(y) MATURITY OF RECEIVABLES. Each Initial Receivable has a final maturity
date not later than July 2003; each Receivable has an original term to maturity
of not more than 73 months; the weighted average original term of the Initial
Receivables is approximately 54.38 months; the weighted average remaining term
of the Initial Receivables is approximately 52.88 months as of the Initial
Cutoff Date.
(z) FINANCING. Approximately 10.05% of the aggregate principal balance of
the Initial Receivables, constituting approximately 6.99% of the number of
Initial Receivables as of the Initial Cutoff Date, represent new vehicles; the
remainder of the Initial Receivables represent used vehicles; approximately
41.21% of the aggregate Principal Balance of the Initial Receivables as of the
Initial Cutoff Date represent Precomputed Receivables and the remainder of the
Initial Receivables represent Simple Interest Receivables; all of the Initial
Receivables which are Precomputed Receivables are Rule of 78s Receivables. The
aggregate Principal Balance of the Initial Receivables, as of the Initial Cutoff
Date, is $185,927,062.83.
(aa) APR. The weighted average Annual Percentage Rate of the Initial
Receivables as of the Initial Cutoff Date is approximately 19.46%. Each
Receivable has an APR equal to or greater than 11.0%.
(bb) NUMBER. There are 18,730 Initial Receivables.
(cc) BALANCE. As of the Initial Cutoff Date, each Initial Receivable has a
remaining principal balance of not less than $1,118.50 and not more than
$30,500; as of the Initial Cutoff Date, the average Principal Balance of the
Initial Receivables is $9,926.70.
SECTION 3.2 REPURCHASE UPON BREACH. (a) The Representative, the Seller, the
Servicer, the Security Insurer or the Owner Trustee, as the case may be, shall
inform the other parties to this Agreement and the Trustee promptly, in writing,
upon the discovery of any breach of the Representative's or the Seller's
representations and warranties made pursuant to Section 3.1. As of the last day
of the second (or, if the Representative or the Seller so elects, the first)
month following the discovery by the Representative or the Seller or receipt by
the Representative or the Seller of notice from any of the Representative, the
Seller, the Servicer, the Security Insurer or the Owner Trustee of such breach,
unless such breach is cured by such date, the Representative and the Seller
shall jointly and severally have an obligation to repurchase any Receivable in
which the interests of the Noteholders or the Certificateholders or the Security
Insurer are materially and adversely affected by any such breach as of such
date. The "second month" shall mean the month following the month in which
discovery occurs or notice is given, and the "first month" shall mean the month
in which discovery occurs or notice is given. In consideration of and
simultaneously with the repurchase of the Receivable, the Representative and/or
the Seller shall remit, or cause TMS Auto Finance to remit, to the Collection
Account the Purchase Amount in the manner specified in Section 5.5 and the
Issuer shall execute such assignments and other documents reasonably requested
by such person in order to effect such repurchase. The sole remedy of the
Issuer, the Owner Trustee, the Trustee, the Noteholders or the
Certificateholders with respect to a breach of representations and warranties
pursuant to Section 3.1 and the agreement contained in this Section shall be the
repurchase of Receivables pursuant to this Section, subject to the conditions
contained herein or to enforce the obligation of TMS Auto Finance to the Seller
to repurchase such Receivables pursuant to the Purchase Agreement. Neither the
Owner Trustee nor the Trustee shall have a duty to conduct any affirmative
investigation as to the occurrence of any conditions requiring the repurchase of
any Receivable pursuant to this Section.
(b) Pursuant to Section 2.1 of this Agreement, the Seller conveyed to the
Trust all of the Seller's right, title and interest in its rights and benefits,
but none of its obligations or burdens, under the Purchase Agreement including
the Seller's rights under the Purchase Agreement and the delivery requirements,
the representations and warranties and the cure or repurchase obligations of TMS
Auto Finance thereunder. The Seller hereby represents and warrants to the Trust
that such assignment is valid, enforceable and effective to permit the Trust to
enforce such obligations of TMS Auto Finance under the Purchase Agreement.
SECTION 3.3. CUSTODY OF RECEIVABLES FILES. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer hereby
revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act as the agent of the Issuer and the Trustee as custodian of
the following documents or instruments which are hereby constructively delivered
to the Trustee, as of the Initial Cutoff Date (in the case of Initial
Receivables) and as of each Subsequent Transfer Date (in the case of Subsequent
Receivables transferred on such Subsequent Transfer Date) as pledgee of the
Issuer with respect to each Receivable:
(a) the original Receivable;
(b) a record of the information supplied by the
Obligor in the original credit application;
(c) the original certificate of title or such documents
that the Servicer shall keep on file, in accordance with its customary
procedures, evidencing the security interest of TMS Auto Finance in the
Financed Vehicle (it being understood that the original certificates
of title generally are not delivered to the Seller for 120
days but that promptly upon delivery they shall be
delivered to the Servicer as custodian hereunder); and
(d) any and all other documents that the Servicer shall
keep on file, in accordance with its customary procedures, relating to a
Receivable, an Obligor or a Financed Vehicle.
SECTION 3.4. DUTIES OF SERVICER AS CUSTODIAN. (a) SAFEKEEPING. The Servicer
shall hold the Receivables Files on behalf of the Issuer and the Trustee and
maintain such accurate and complete accounts, records and computer systems
pertaining to each Receivable File as shall enable the Issuer to comply with
this Agreement. In performing its duties as custodian the Servicer shall act
with reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to the receivable files relating to all comparable
automotive receivables that the Servicer services for itself or others, and in
any event with no less degree of skill and care than would be exercised by a
prudent servicer or custodian of non-prime motor vehicle retail installment
sales contracts, except that the Servicer shall not be obligated, and does not
currently intend, to (i) pay any premium of force-placed insurance concerning
any Financed Vehicle or (ii) monitor any Obligor's maintenance of such
insurance. The Servicer shall conduct, or cause to be conducted, periodic audits
of the Receivables Files held by it under this Agreement and of the related
accounts, records and computer systems, in such a manner as shall enable the
Owner Trustee, the Security Insurer or the Trustee to verify the accuracy of the
Servicer's record keeping. The Servicer shall promptly report to the Issuer, the
Security Insurer and the Trustee any failure on its part to hold the Receivables
Files and maintain its accounts, records and computer systems as herein provided
and promptly take appropriate action to remedy any such failure.
(b) MAINTENANCE OF RECORDS. The Servicer shall maintain each Receivable
File at its office specified in Schedule B to the Agreement or at such other
office as shall be specified to the Issuer, the Trustee and the Security Insurer
by written notice not later than 10 days after any change in location. The
Servicer shall (i) at all times maintain the original of the fully executed
Receivable and store such original Receivable in a fireproof cabinet; and (ii)
stamp each Receivable on both the first and the signature page (if different) as
of the Closing Date or the related Subsequent Transfer Date, as applicable, and
in accordance with the instructions from time to time provided by the Security
Insurer, in the form attached hereto as Exhibit F, or such other form as shall
be acceptable to the Security Insurer.
(c) ACCESS TO RECORDS. The Servicer will provide, on the Closing Date, an
Officer's Certificate stating that the Receivables Files contain all materials
which are required to be kept therein by Section 3.3(a), (b), (c) and (d). At
any time following the Closing Date, the Security Insurer may conduct a review
of the Receivables Files, or a sample thereof as it may specify, at its own
expense but with the cooperation of the Servicer. Should the Security Insurer
find any documents missing or any other irregularities, then the Trustee shall
perform a review, for the benefit of the Security Insurer and at the expense of
the Servicer, of all the Receivables Files.
Upon reasonable prior notice, the Servicer shall make available to the
Issuer, the Trustee, the Security Insurer, or any duly authorized
representatives, attorneys or auditors of any of the foregoing, a list of
locations of, and access to, the Receivables Files and records and computer
systems maintained by the Servicer at such times during normal business hours as
the Issuer, the Trustee or the Security Insurer shall instruct.
(d) RELEASE OF DOCUMENTS. Upon written instruction from the Trustee or the
Security Insurer, at any time following a Servicer Default or termination of the
Servicer's appointment pursuant to Section 3.7 the Servicer shall release any
Receivable File to the Trustee, the Trustee's agent, or the Trustee's designee,
as the case may be, or the Security Insurer, as the case may be, at such place
or places as the Trustee or the Security Insurer, as the case may be, may
designate, as soon as practicable.
SECTION 3.5. INSTRUCTIONS; AUTHORITY TO ACT. The Servicer shall be deemed
to have received proper instructions with respect to the Receivables Files upon
its receipt of written instructions signed by a Trust Officer of the Trustee. A
copy of such instructions shall be furnished by the Trustee to the Security
Insurer. The Trustee shall not have any duty or obligation to provide the
Servicer with any such instructions with respect to the Receivables Files.
SECTION 3.6. CUSTODIAN'S INDEMNIFICATION. The Servicer as custodian shall
indemnify and hold harmless the Trust, the Security Insurer, the Owner Trustee
and the Trustee and each of their officers, directors, employees and agents for
any and all liabilities, obligations, losses, compensatory damages, payments,
costs or expenses (including reasonable attorneys' fees and expenses) that may
be imposed on, incurred by or asserted against the Trust, the Owner Trustee or
the Trustee or any of their officers, directors, employees and agents as the
result of any improper act or omission in any way relating to the maintenance
and custody by the Servicer as custodian of the Receivables Files; PROVIDED,
HOWEVER, that the Servicer shall not be liable to the Trust, the Owner Trustee,
the Trustee or the Security Insurer, as the case may be, for any portion of any
such amount resulting from the willful misfeasance, bad faith or negligence of
the Owner Trustee, the Trustee or the Security Insurer, as the case may be. This
provision shall not be considered to limit the Servicer's or any other party's
rights, obligations, liabilities, claims or defenses which arise as a matter of
law or pursuant to any other provision of this Agreement.
SECTION 3.7. EFFECTIVE PERIOD AND TERMINATION. The Servicer's appointment
as custodian shall become effective as of the Initial Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section 3.7.
If TMS Auto Finance shall resign as Servicer in accordance with the provisions
of this Agreement or if all of the rights and obligations of any Servicer shall
have been terminated under Section 8.1, the appointment of such Servicer as
custodian shall be terminated, in the same manner as the Servicer may be
terminated under Section 8.1. The Trustee or, with the consent of the Trustee,
the Owner Trustee may, in each case, with the consent of the Security Insurer,
and the Security Insurer may terminate the Servicer's appointment as custodian
(i) with cause or (ii) upon the occurrence of an Insurance Agreement Event of
Default, upon written notification to the Servicer and the Trustee or Security
Insurer, as the case may be. As soon as practicable after any termination of
such appointment, the Servicer shall deliver the Receivables Files to the
Trustee or the Trustee's agent at such place or places as the Trustee, with the
consent of the Security Insurer, or the Trustee shall, at the direction of the
Security Insurer, reasonably designate in writing. If the Servicer shall be
terminated as custodian hereunder for any reason but shall continue to serve as
Servicer, the Trustee shall, or shall cause its agent to, make the Receivables
Files available to the Servicer during normal business hours upon reasonable
notice so as to permit the Servicer to perform its obligations as Servicer
hereunder.
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.1. DUTIES OF SERVICER. The Servicer, as agent for the Issuer and
the Security Insurer (to the extent provided herein), shall manage, service,
administer and make collections on the Receivables (other than Purchased
Receivables) with reasonable care, using that degree of skill and attention that
the Servicer exercises with respect to all comparable automotive receivables
that it services for itself or others, and in any event with no less degree of
skill and care than would be exercised by a prudent servicer of non-prime motor
vehicle retail installment sales contracts, except that the Servicer shall not
be obligated, and does not currently intend, to (i) pay any premium of
force-placed insurance concerning any Financed Vehicle or (ii) monitor any
Obligor's maintenance of such insurance. The Servicer's duties shall include
collection and posting of all payments, responding to inquiries of Obligors on
such Receivables, investigating delinquencies, sending payment statements to
Obligors, accounting for collections and furnishing monthly and annual
statements to the Owner Trustee, the Trustee and the Security Insurer with
respect to distributions. Subject to the provisions of Section 4.2, the Servicer
shall follow its customary standards, policies and procedures in performing its
duties as Servicer. Without limiting the generality of the foregoing, the
Servicer is authorized and empowered to execute and deliver, on behalf of
itself, the Issuer, the Owner Trustee, the Trustee, the Security Insurer, the
Certificateholders and the Noteholders or any of them, any and all instruments
of satisfaction or cancellation, or partial or full release or discharge, and
all other comparable instruments, with respect to such Receivables or to the
Financed Vehicles securing such Receivables. If the Servicer shall commence a
legal proceeding to enforce a Receivable, the Issuer (in the case of a
Receivable other than a Purchased Receivable) shall thereupon be deemed to have
automatically assigned, solely for the purpose of collection, such Receivable to
the Servicer. If in any enforcement suit or legal proceeding it shall be held
that the Servicer may not enforce a Receivable on the ground that it shall not
be a real party in interest or a holder entitled to enforce such Receivable the
Owner Trustee shall, at the Servicer's expense and direction, take steps to
enforce such Receivable, including bringing suit in its name or the name of the
Trust, the Trustee, the Certificateholders or the Noteholders. The Owner Trustee
and the Security Insurer shall upon the written request of the Servicer furnish
the Servicer with any powers of attorney and other documents reasonably
necessary or appropriate (as certified to the Owner Trustee and/or the Security
Insurer by the Servicer) to enable the Servicer to carry out its servicing and
administrative duties hereunder.
SECTION 4.2. COLLECTION AND ALLOCATION OF RECEIVABLE PAYMENTS. (a) The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Receivables as and when the same shall become
due and shall follow such collection procedures as it follows with respect to
all comparable automotive receivables that it services for itself or others, and
in any event with no less degree of skill and care than would be exercised by a
prudent servicer of non-prime motor vehicle retail installment sales contracts.
The Servicer shall allocate collections between principal and interest in
accordance with its customary servicing procedures.
(b) The Servicer may grant extensions, rebates or adjustments on a
Receivable which shall not, for the purposes of this Agreement, modify the
original due dates (other than to permit payment on a different date in the
month) or amounts of the Scheduled Payments (unless the Obligor is in default
or, in the judgment of the Servicer, such default is imminent) on a Precomputed
Receivable or the original due dates (other than to permit payment on a
different date in the month) or amounts of the originally scheduled payments of
interest (unless the Obligor is in default or, in the judgment of the Servicer,
such default is imminent) on Simple Interest Receivables; PROVIDED, HOWEVER,
that if the Servicer extends the date for final payment by the Obligor of any
Receivable beyond the Final Scheduled Maturity Date, it shall promptly
repurchase such Receivable from the Trust in accordance with Section 4.7. The
Servicer may in its discretion waive any late payment charge or any other fees
that may be collected in the ordinary course of servicing a Receivable. The
Servicer shall not agree to any alteration of the interest rate on any
Receivable.
SECTION 4.3 REALIZATION UPON RECEIVABLES. On behalf of the Issuer and the
Security Insurer, the Servicer shall use its best efforts, consistent with its
customary servicing procedures, to repossess or otherwise convert the ownership
of the Financed Vehicle securing any Receivable as to which the Servicer shall
have determined eventual payment in full is unlikely. From time to time, as
appropriate for servicing or foreclosing upon any Receivable, the Owner Trustee
shall, upon written request of the Servicer, execute such documents as shall be
reasonably necessary to prosecute any such proceedings. The Servicer shall
follow such customary and usual practices and procedures as it shall deem
necessary or advisable in its servicing of automotive receivables, which may
include reasonable efforts to realize proceeds from Receivables repurchased by a
Dealer, pursuant to a Dealer Agreement, as a result of a breach of
representation or warranty in the related Dealer Agreement or a default by an
Obligor resulting in the repossession of the Financed Vehicle under such Dealer
Agreement. The foregoing shall be subject to the provision that, in any case in
which the Financed Vehicle shall have suffered damage, the Servicer shall not
expend funds in connection with the repair or the repossession of such Financed
Vehicle unless it shall determine in its reasonable discretion that such repair
and/or repossession will increase the Net Liquidation Proceeds by an amount
greater than the amount of such expenses.
SECTION 4.4. PHYSICAL DAMAGE INSURANCE. The Servicer shall, in accordance
with its customary servicing procedures, require that each Obligor shall have
obtained and shall maintain fire, theft and collision insurance or comprehensive
and collision insurance covering the Financed Vehicle as of the execution of the
Receivable. The Servicer shall enforce its rights under the Receivables to
require the Obligors to maintain fire, theft and collision insurance or
comprehensive and collision insurance, in accordance with the Servicer's
customary practices and procedures, and in any event with no less degree of
skill and care than would be exercised by a prudent servicer of non-prime motor
vehicle retail installment sales contracts, and in any event with no less degree
of skill and care than would be exercised by a prudent servicer of non-prime
motor vehicle retail installment sales contracts, with respect to comparable new
or used motor vehicle receivables that it services for itself or others, except
that the Servicer shall not be obligated, and does not currently intend, to (i)
pay any premium of force-placed insurance concerning any Financed Vehicle or
(ii) monitor any Obligor's maintenance of such insurance.
SECTION 4.5. MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES. (a)
The Servicer shall, in accordance with its customary servicing procedures, take
such steps as are necessary to maintain perfection of the security interest
created by each Receivable in the related Financed Vehicle in favor of the
Seller. The Servicer is hereby authorized to take such steps as are necessary to
re-perfect such security interest on behalf of the Issuer and the Indenture
Collateral Agent in the event of the relocation of a Financed Vehicle or for any
other reason.
(b) Upon the occurrence of an Insurance Agreement Event of Default, and
subject to the other provisions of this Agreement, the Security Insurer may (so
long as an Insurer Default shall not have occurred and be continuing) instruct
the Owner Trustee and the Servicer to take or cause to be taken, or, if an
Insurer Default shall have occurred, upon the occurrence of a Servicer Default,
the Owner Trustee and the Servicer shall take or cause to be taken such action
as may, in the opinion of counsel to the Security Insurer (or, if an Insurer
Default shall have occurred and be continuing, counsel to the Owner Trustee), be
necessary to perfect or reperfect the security interests in the Financed
Vehicles securing the Receivables in the name of the Trust by amending the title
documents of such Financed Vehicles or by such other reasonable means as may, in
the opinion of counsel to the Security Insurer or the Owner Trustee (as
applicable), be necessary or prudent. The Servicer hereby agrees to pay all
expenses related to such perfection or reperfection and to take all action
necessary therefor.
SECTION 4.5-A. SEGREGATION OF RECEIVABLES FILES. The Servicer shall
maintain the Receivables Files (containing the original Receivable and Lien
Certificate, when such Lien Certificate has been returned from the appropriate
recording office) physically segregated from other files of automotive
receivables owned or serviced by it at the location where the Receivables Files
are kept.
SECTION 4.6. COVENANTS OF SERVICER. The Servicer shall not release the
Financed Vehicle securing any Receivable from the security interest granted by
such Receivable in whole or in part except in the event of payment in full by
the Obligor thereunder or payment in full less a deficiency which the Servicer
would not attempt to collect in accordance with its customary procedures or in
connection with repossession or except as may be required by an insurer in order
to receive proceeds from insurance covering such Financed Vehicle, nor shall the
Servicer impair the rights of the Issuer, the Trustee, the Indenture Collateral
Agent, the Security Insurer, the Certificateholders or the Noteholders in such
Receivables (it being understood that no action of the Servicer taken in
compliance with the terms of this Agreement shall be deemed to impair such
rights), nor shall the Servicer increase the number of scheduled payments due
under a Receivable.
SECTION 4.7. PURCHASE OF RECEIVABLES UPON BREACH. The Representative, the
Seller, the Servicer, the Security Insurer or the Owner Trustee shall inform the
other parties and the Trustee promptly, in writing, upon the discovery of any
breach of the Servicer's covenants pursuant to Section 4.2(b), 4.4, 4.5 or 4.6,
or of any breach of the Servicer's representations and warranties made pursuant
to Section 7.1(b). As of the last day of the second (or, if the Representative
or the Servicer so elects, the first) month following the discovery by the
Representative or the Servicer or receipt by the Representative or the Servicer
of notice from any of the Representative, the Seller, the Servicer, the Security
Insurer, the Owner Trustee or the Trustee of such breach, unless such breach is
cured by such date, the Representative and the Servicer jointly and severally
shall be obligated to purchase any Receivable in which the interests of the
Noteholders, the Certificateholders or the Security Insurer are materially and
adversely affected by such breach as of such date. The "second month" shall mean
the month following the month in which discovery occurs or notice is given, and
the "first month" shall mean the month in which discovery occurs or notice is
given. In consideration of the purchase of any such Receivable pursuant to the
preceding sentence, the Servicer shall remit (or, if the Servicer shall fail to
so remit, the Representative shall remit) the Purchase Amount in the manner
specified in Section 5.5. The sole remedy of the Issuer, the Trustee, the
Noteholders or the Certificateholders with respect to a breach pursuant to
Section 4.2(b), 4.4, 4.5 or 4.6, or to a breach of representations and
warranties pursuant to Section 7.1(b), shall be limited to the purchase of
Receivables in accordance with this Section 4.7. The Trustee and the Owner
Trustee shall have no duty to conduct any affirmative investigation as to the
occurrence of any condition requiring the purchase of any Receivable pursuant to
this Section 4.7.
SECTION 4.8. SERVICING FEE. The Servicing Fee for a Distribution Date shall
equal the sum of the Base Servicing Fee, the Supplemental Servicing Fee, all
Investment Earnings on the Collection Account plus any reimbursement pursuant to
Section 7.2. The Servicer also shall be entitled to retain from collections the
Base Servicing Fee and the Supplemental Servicing Fee, as provided herein. The
Servicer, in its discretion at its election, may defer receipt of all or any
portion of the Servicing Fee for any Monthly Period to and until a later Monthly
Period for any reason, including in order to avoid a shortfall in any payments
due on any Notes or Certificates. Any such deferred amount shall be payable to
(or may be retained from subsequent collections by) the Servicer on demand.
SECTION 4.9. SERVICER'S CERTIFICATE. (a) No later than 12:00 noon New York
City time on each Determination Date, the Servicer shall deliver to the Owner
Trustee, the Trustee, the Security Insurer, the Indenture Collateral Agent and
each Rating Agency a Servicer's Certificate containing, among other things, (i)
all information necessary to enable the Trustee to make any withdrawal and
deposit required by Section 5.6(a), 5.6(b), 5.6(c) and 5.6(d), to give any
notice required by Section 5.4 or 5A.1 and make the distributions required by
Section 5.6 and 5.7, (ii) all information necessary to enable the Trustee to
send the statements required by Section 5.8 to the Owner Trustee, the
Noteholders, each Rating Agency and the Security Insurer, (iii) a listing of all
Receivables purchased during the related Monthly Period, identifying the
Receivables so purchased, and (iv) all information necessary to enable the
Trustee to reconcile all deposits to, and withdrawals from, the Collection
Account for the related Monthly Period and Distribution Date, including the
accounting required by Section 5.9. Receivables purchased by the Servicer, the
Seller or the Representative and each receivable which became a Liquidated
Receivable or which was paid in full during the related Monthly Period shall be
identified by account number (as set forth in the Schedule of Receivables). A
copy of such certificate may be obtained by any Noteholder or Certificateholder
by a request in writing to the Trustee or the Owner Trustee addressed to the
applicable Corporate Trust Office. The Trustee shall not be under any obligation
to confirm or reconcile the information provided pursuant to Section 4.9(a)(iv).
(b) If the Servicer's Certificate contains a manifest error, the Security
Insurer's written notice to the Servicer, the Owner Trustee and the Trustee
containing the corrected information shall be deemed to amend such Servicer's
Certificate.
SECTION 4.10. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT. (a) The
Servicer shall deliver to the Owner Trustee, the Trustee and the Security
Insurer, on or before April 30 of each year beginning April 30, 1998 an
Officer's Certificate, dated as of the preceding December 31, stating that (i) a
review of the activities of the Servicer during the preceding 12-month period
and of its performance under this Agreement has been made under such officer's
supervision and (ii) to the best of such officer's knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Agreement
throughout such year or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officers and the
nature and status thereof. The Trustee shall send a copy of such certificate and
the report referred to in Section 4.11 to the Rating Agencies. A copy of such
certificate and the report referred to in Section 4.11 may be obtained by any
Certificateholder by a request in writing to the Owner Trustee addressed to the
Corporate Trust Office or by any Noteholder by a request in writing to the
Trustee addressed to the Corporate Trust Office. Upon the telephone request of
the Owner Trustee, the Trustee will promptly furnish the Owner Trustee a list of
Noteholders as of the date specified by the Owner Trustee. Each Noteholder, by
its acceptance of a Note, shall be deemed to agree that the Trustee shall be
under no liability for providing the list of Noteholders to the Owner Trustee as
described in the immediately preceding sentence.
(b) The Servicer shall deliver to the Owner Trustee, the Trustee, the
Security Insurer and the Rating Agencies, promptly after having obtained
knowledge thereof, but in no event later than five (5) Business Days thereafter,
written notice in an Officer's Certificate of any event which with the giving of
notice or lapse of time, or both, would become a Servicer Default under Section
8.1(a) or (b).
SECTION 4.11. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT. The
Servicer shall cause a firm of independent certified public accountants, which
may also render other services to the Servicer or the Seller, to deliver to the
Seller, the Owner Trustee, the Trustee and the Security Insurer on or before
April 30 of each year beginning April 30, 1998, an agreed-upon procedures report
addressed to the Servicer, the Seller, the Owner Trustee, the Trustee and the
Security Insurer and each Rating Agency, expressing a summary of findings,
(based on certain procedures performed on the documents, records and accounting
records that such accountants considered appropriate under the circumstances)
relating to the servicing of the Receivables, or the administration of the
Receivables and of the Trust, as the case may be, during the preceding calendar
year and that, on the basis of the accounting and auditing procedures considered
appropriate under the circumstances, such firm is of the opinion that such
servicing or administration was conducted in compliance with the terms of this
Agreement, except for (i) such exceptions as such firm shall believe to be
immaterial and (ii) such other exceptions as shall be set forth in such report.
Such report will also indicate that the firm is independent of the Servicer
within the meaning of the Code of Professional Ethics of the American Institute
of Certified Public Accountants.
SECTION 4.12. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
RECEIVABLES. The Servicer shall provide to representatives of the Trustee, the
Owner Trustee and the Security Insurer reasonable access to the Receivable
Files. The Servicer shall provide to the Certificateholders and Noteholders
access to the Receivable Files in such cases where the Certificateholders or
Noteholders shall be required by applicable statutes or regulations to review
such documentation as demonstrated by evidence satisfactory to the Servicer in
its reasonable judgment. Access shall be afforded without charge, but only upon
reasonable request and during the normal business hours at the respective
offices of the Servicer. Nothing in this Section shall affect the obligation of
the Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors and the failure of the Servicer to provide access to
information as a result of such obligation shall not constitute a breach of this
Section.
SECTION 4.13. SERVICER EXPENSES. The Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder and under
any of the Basic Documents, including fees and disbursements of independent
accountants, taxes imposed on the Servicer and expenses incurred in connection
with distributions and reports to Certificateholders and Noteholders.
SECTION 4.14. APPOINTMENT OF SUBSERVICER. The Servicer may at any time
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; PROVIDED, HOWEVER, that the Rating Agency Condition shall
have been satisfied in connection therewith; PROVIDED FURTHER that the Servicer
shall remain obligated and be liable to the Issuer, the Owner Trustee, the
Trustee, the Security Insurer, the Certificateholders and the Noteholders for
the servicing and administering of the Receivables in accordance with the
provisions hereof without diminution of such obligation and liability by virtue
of the appointment of such subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and administering
the Receivables. The fees and expenses of the subservicer shall be as agreed
between the Servicer and its subservicer from time to time and none of the
Issuer, the Owner Trustee, the Trustee, the Security Insurer, the
Certificateholders or the Noteholders shall have any responsibility therefor.
Any such subservicer shall perform its duties with the same standard of care
applicable to the Servicer pursuant to Section 4.1 of this Agreement.
SECTION 4.15. OBLIGATIONS UNDER BASIC DOCUMENTS. The Servicer shall perform
all of its obligations under the Basic Documents.
ARTICLE V
DISTRIBUTIONS;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 5.1. ESTABLISHMENT OF TRUST ACCOUNTS. (a)
(i) The Servicer, for the benefit of the Trustee on
behalf of the Noteholders, the Owner Trustee on behalf of
the Certificateholders, and the Security Insurer, shall
establish and maintain in the name of the Indenture Collateral Agent an
Eligible Deposit Account (the "Collection Account"), bearing a
designation clearly indicating that the funds deposited therein are
held for the benefit of the Trustee on behalf of the Noteholders, the
Owner Trustee on behalf of the Certificateholders and the Security
Insurer. Investment Earnings on funds in the
Collection Account shall be paid to the Servicer.
(ii) The Servicer, for the benefit of the Trustee on
behalf of the Noteholders, shall establish and maintain
in the name of the Indenture Collateral Agent an Eligible
Deposit Account (the "Note Distribution Account"),
bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Trustee
on behalf of the Noteholders and the Security Insurer.
The Note Distribution Account shall initially be
established with the Trustee.
(iii) The Servicer, for the benefit of the Trustee on behalf
of the Noteholders, the Owner Trustee on behalf of the
Certificateholders, and the Security Insurer, shall establish and
maintain in the name of the Indenture
Collateral Agent an Eligible Deposit Account (the "Pre-Funding
Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Trustee on behalf of
the Noteholders, the Owner Trustee on behalf of the Certificateholders
and the Security Insurer.
(b) Funds on deposit in the Collection Account, the Pre-Funding Account,
the Note Distribution Account (collectively, along with the Capitalized Interest
Account, the "Trust Accounts") and the Certificate Distribution Account shall be
invested by the Indenture Collateral Agent with respect to Trust Accounts and by
the Owner Trustee with respect to the Certificate Distribution Account (or any
custodian with respect to funds on deposit in any such account) in Eligible
Investments selected in writing by the Servicer (pursuant to standing
instructions or otherwise); PROVIDED, HOWEVER, it is understood and agreed that
neither the Indenture Collateral Agent nor the Owner Trustee shall be liable for
any loss arising from such investment in Eligible Investments. All such Eligible
Investments shall be held by or on behalf of the Indenture Collateral Agent or
the Owner Trustee, as applicable, for the benefit of the Noteholders and/or the
Certificateholders, as applicable and the Security Insurer. Other than as
permitted by the Rating Agencies and the Security Insurer, funds on deposit in
the Collection Account, the Pre-Funding Account, the Capitalized Interest
Account, the Note Distribution Account and the Certificate Distribution Account
shall be invested in Eligible Investments that will mature so that such funds
will be available at the close of business on the Business Day immediately
preceding the following Distribution Date. Funds deposited in a Trust Account or
the Certificate Distribution Account on the day immediately preceding a
Distribution Date upon the maturity of any Eligible Investments are not required
to be invested overnight.
(c) (i) The Indenture Collateral Agent shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts and in
all proceeds thereof (excluding all Investment Earnings on the Collection
Account) and all such funds, investments, proceeds and income shall be part of
the Owner Trust Estate. Except as otherwise provided herein, the Trust Accounts
shall be under the sole dominion and control of the Indenture Collateral Agent
for the benefit of the Noteholders and the Certificateholders, or the
Noteholders, as the case may be, and the Security Insurer. If, at any time, any
of the Trust Accounts or the Certificate Distribution Account ceases to be an
Eligible Deposit Account, the Indenture Collateral Agent (or the Servicer on its
behalf) or the Owner Trustee, as applicable, shall within 10 Business Days (or
such longer period as to which each Rating Agency and the Security Insurer may
consent) establish a new Trust Account or a new Certificate Distribution
Account, as applicable, as an Eligible Deposit Account and shall transfer any
cash and/or any investments to such new Trust Account or a new Certificate
Distribution Account, as applicable. In connection with the foregoing, the
Servicer agrees that, in the event that any of the Trust Accounts are not
accounts with the Trustee, the Servicer shall notify the Trustee in writing
promptly upon any of such Trust Accounts ceasing to be an Eligible Deposit
Account.
(ii) With respect to the Trust Account Property, the
Indenture Collateral Agent, and with respect to the
Certificate Distribution Account, the Owner Trustee agrees, by its
respective acceptance hereof, that:
(A) any Trust Account Property or any property in the
Certificate Distribution Account that is held in deposit
accounts shall be held solely in the Eligible Deposit Accounts
subject to the penultimate sentence of Section 5.1(c)(i); and,
except as otherwise provided herein, each such Eligible
Deposit
Account shall be subject to the exclusive custody and control
of the Indenture Collateral Agent with respect to the Trust
Accounts and the Owner Trustee with respect to the Certificate
Distribution Account, and the Indenture Collateral Agent or
the Owner Trustee, as applicable, shall have sole signature
authority with respect thereto;
(B) any Trust Account Property that constitutes
Physical Property shall be delivered to the
Indenture Collateral Agent in accordance with paragraph (a) of
the definition of "Delivery" and shall be held, pending
maturity or disposition, solely by the Indenture Collateral
Agent or a financial intermediary (as such term is defined in
Section 8-313(4) of the UCC) acting solely for the Indenture
Collateral Agent;
(C) any Trust Account Property that is a book-entry
security held through the Federal Reserve System pursuant to
Federal book-entry regulations shall be delivered in
accordance with paragraph (b) of the definition of "Delivery"
and shall be maintained by the Indenture Collateral Agent,
pending maturity or disposition, through continued book-entry
registration of such Trust Account Property as described in
such paragraph; and
(D) any Trust Account Property that is an
"uncertificated security" under Article 8 of the UCC and that
is not governed by clause (C) above shall be
delivered to the Indenture Collateral Agent in accordance
with paragraph (c) of the definition of "Delivery" and shall
be maintained by the Indenture Collateral Agent, pending
maturity or disposition, through continued registration of the
Indenture Collateral Agent's (or its nominee's) ownership of
such security.
(d) The Servicer shall have the power, revocable by the
Security Insurer or, with the consent of the Security Insurer by the
Trustee or by the Owner Trustee with the consent of the Trustee, to
instruct the Indenture Collateral Agent to make withdrawals and
payments from the
Trust Accounts for the purpose of permitting the Servicer
or the Owner Trustee to carry out its respective duties
hereunder or permitting the Trustee to carry out its
duties under the Indenture.
(e) [RESERVED]
SECTION 5.1-A CAPITALIZED INTEREST ACCOUNT. (a) With respect to amounts on
deposit in the Pre-Funding Account, in order to assure that sufficient amounts
to make required distributions of interest to Noteholders and Certificateholders
will be available during the Funding Period, the Servicer shall establish and
maintain an Eligible Deposit Account (the "Capitalized Interest Account") with
the Indenture Collateral Agent, bearing a designation clearly indicating that
the funds deposited therein are held in trust for the benefit of the
Noteholders, Certificateholders and the Security Insurer.
On or prior to the Closing Date, the Seller shall deposit an amount equal
to the Capitalized Interest Account Initial Deposit into the Capitalized
Interest Account.
(b) On the Distribution Date occurring in July, August and September of
1997 the Trustee shall withdraw from the Capitalized Interest Account the
Monthly Capitalized Interest Amount for such Distribution Date as further
provided in Section 5.6. Any amounts remaining in the Capitalized Interest
Account after taking into account such transfer shall be remitted by the Trustee
to the Seller as set forth in Section 5.6. Upon any such distribution to the
Seller, the Noteholders, the Certificateholders and the Security Insurer will
have no further rights in, or claims to, such amounts.
SECTION 5.2. COLLECTIONS. (a) The Servicer shall remit within two Business
Days of receipt thereof to the Collection Account all payments by or on behalf
of the Obligors with respect to the Receivables (other than Purchased
Receivables) and all Liquidation Proceeds, both as collected during the Monthly
Period less any payments owed thereon to the Servicer. Notwithstanding the
foregoing, for so long as (i) TMS Auto Finance remains the Servicer, (ii) no
Servicer Default shall have occurred and be continuing, (iii) there exists no
Insurer Default and the Security Insurer has furnished its prior written consent
and (iv) the Rating Agency Condition shall have been satisfied (and any
conditions or limitations imposed by the Rating Agencies in connection therewith
are complied with), the Servicer may remit such collections with respect to the
preceding calendar month to the Collection Account on the Determination Date
immediately preceding the related Distribution Date. For purposes of this
Article V the phrase "payments by or on behalf of Obligors" shall mean payments
made with respect to the Receivables by Persons other than the Servicer or the
Seller.
(b) The Servicer will be entitled to be reimbursed from amounts on deposit
in the Collection Account with respect to a Monthly Period for amounts
previously deposited in the Collection Account but later determined by the
Servicer to have resulted from mistaken deposits or postings or checks returned
for insufficient funds. The amount to be reimbursed hereunder shall be paid to
the Servicer on the related Distribution Date pursuant to Section 5.6(b)(ii)
upon certification by the Servicer of such amounts and the provision of such
information to the Trustee and the Security Insurer as may be necessary in the
opinion of the Security Insurer to verify the accuracy of such certification. In
the event that the Security Insurer has not received evidence satisfactory to it
of the Servicer's entitlement to reimbursement pursuant to Section 5.2(b), the
Security Insurer shall (unless an Insurer Default shall have occurred and be
continuing) give the Trustee notice to such effect, following receipt of which
the Trustee shall not make a distribution to the Servicer in respect of such
amount pursuant to Section 5.6, or if the Servicer prior thereto has been
reimbursed pursuant to Section 5.6 or Section 5.9, the Trustee shall withhold
such amounts from amounts otherwise distributable to the Servicer on the next
succeeding Distribution Date.
SECTION 5.3. APPLICATION OF COLLECTIONS. All collections for the Monthly
Period shall be applied by the Servicer as follows:
With respect to each Receivable (other than a Purchased Receivable),
payments by or on behalf of the Obligor, (other than Supplemental Servicing Fees
with respect to such Receivable, to the extent collected) shall be applied
first, in the case of Precomputed Receivables, to the Scheduled Payment and, in
the case of Simple Interest Receivables, to interest and principal in accordance
with the Simple Interest Method. With respect to any Precomputed Receivable, any
remaining excess shall be applied to prepay the principal of the Precomputed
Receivable.
All amounts collected that are payable to the Servicer as Supplemental
Servicing Fees hereunder shall, other than as provided in Section 5.9, be
deposited in the Collection Account and paid to the Servicer in accordance with
Section 5.6(b).
SECTION 5.4. DEFICIENCY NOTICE. (a) In the event that the Servicer's
Certificate with respect to any Determination Date shall state that the amount
of the Available Funds with respect to such Determination Date is less than the
sum of the amounts payable on the related Distribution Date pursuant to clauses
(i) through (vii) of Section 5.6(b) (such deficiency being a "Deficiency Claim
Amount") then on the Deficiency Claim Date immediately preceding such
Distribution Date, the Trustee shall deliver to the Indenture Collateral Agent,
the Security Insurer, the Owner Trustee and the Servicer, by hand delivery,
telex or facsimile transmission, a written notice (a "Deficiency Notice")
specifying the Deficiency Claim Amount for such Distribution Date.
(b) Any Deficiency Notice shall be delivered by 10:00 am., New York City
time, on the related Deficiency Claim Date. The amounts distributed to the
Trustee pursuant to a Deficiency Notice shall be deposited by the Trustee into
the Collection Account pursuant to Section 5.5.
SECTION 5.5. ADDITIONAL DEPOSITS. The Servicer and the Seller, TMS Auto
Finance and the Representative, as applicable, shall deposit or cause to be
deposited in the Collection Account on the Determination Date following the date
on which such obligations are due the aggregate Purchase Amount with respect to
Purchased Receivables. On or before each Draw Date, the Trustee shall remit to
the Collection Account any amounts delivered to the Trustee pursuant to a
Deficiency Notice.
SECTION 5.6. DISTRIBUTIONS. (a) No later than 12:00 noon New York City time
on each Distribution Date, the Trustee shall (based solely on the information
contained in the Servicer's Certificate delivered on the related Determination
Date) cause to be made the following transfers and distributions in the amounts
set forth in the Servicer's Certificate for such Distribution Date:
(i) During the Funding Period, from the Capitalized Interest
Account (a) to the Collection Account, in immediately available funds,
the Monthly Capitalized Interest Amount for such Distribution Date and
(b) to the Seller, in immediately available funds, all Investment
Earnings on funds in the Capitalized Interest Account with
respect to the Monthly Period related to such Distribution Date or, if
such Distribution Date is the Mandatory Redemption Date, all remaining
funds in the Capitalized Interest Account after distribution of
interest on the Notes and Certificates on such date; and
(ii) During the Funding Period from the Pre-Funding Account
(a) if such Distribution Date is the Mandatory Redemption Date, to the
Collection Account, in immediately
available funds, the Pre-Funded Amount (exclusive of Pre- Funding
Earnings) after giving effect to the purchase of Subsequent
Receivables, if any, on the Mandatory Redemption Date, and (b) to the
Seller, in immediately available funds, all Pre-Funding Earnings with
respect to the Monthly Period related to such Distribution Date or, if
such Distribution Date is the Mandatory Redemption Date, all remaining
funds in the Pre-Funding Account over and above the Pre-Funded Amount.
(b) On each Distribution Date other than the Distribution Date on which
Insolvency Proceeds are to be distributed, the Trustee shall (based solely on
the information contained in the Servicer's Certificate delivered with respect
to the related Determination Date) distribute the following amounts and in the
following order of priority:
(i) from the Distribution Amount, to each of the Trustee and
the Owner Trustee, their respective accrued and unpaid trustees' fees
and any accrued and unpaid fees of the Indenture Collateral Agent (in
each case, to the extent such fees have not been previously paid by the
Servicer or the Representative);
(ii) from the Distribution Amount, to the Servicer,
the Base Servicing Fee for the related Monthly Period, any
Supplemental Servicing Fees for the related Monthly Period, and any
amounts specified in Section 5.2(b), to the extent the Servicer has not
reimbursed itself in respect of such amounts pursuant to Section 5.9
and to the extent not retained by the Servicer;
(iii) from the Distribution Amount, to the Note
Distribution Account, the Noteholders' Interest
Distributable Amount;
(iv) from the Distribution Amount, to the Note
Distribution Account, the Noteholders' Principal
Distributable Amount;
(v) from the Distribution Amount, to the Owner
Trustee for deposit in the Certificate Distribution
Account, the Certificateholders' Interest Distributable
Amount;
(vi) from the Distribution Amount, to the Owner
Trustee for deposit in the Certificate Distribution
Account, the Certificateholders' Principal Distributable
Amount;
(vii) from the Distribution Amount, to the Security Insurer,
any premium amounts and any overdue premium amounts payable pursuant to
the Insurance Agreement, and, any payments made on the Policies and any
other amounts owing to the Security Insurer under the Insurance
Agreement and not paid;
(viii) prior to the Parity Date, from the Available
Funds, to the Note Distribution Account, the Accelerated
Principal Distributable Amount; and
(ix) from the Available Funds, to or upon the order
of the Seller, any remaining funds.
PROVIDED, HOWEVER, that, (A) following an acceleration of the Notes or, (B) if
an Insurer Default shall have occurred and be continuing, following the
occurrence of an Event of Default pursuant to Section 5.1(i), 5.1(ii), 5.1(iii),
5.1(v) or 5.1(vi) of the Indenture, or (C) following the receipt of Insolvency
Proceeds pursuant to Section 9.1(b), amounts deposited in the Note Distribution
Account and the Certificate Distribution Account (including any such Insolvency
Proceeds) shall be paid to the Noteholders and the Certificateholders in
accordance with the provisions of Section 5.6 of the Indenture.
(c) [RESERVED]
(d) In the event that the Collection Account is maintained with an
institution other than the Indenture Collateral Agent, the Servicer shall
instruct and cause such institution to make all deposits and distributions
pursuant to Section 5.6(b) on the related Distribution Date.
SECTION 5.7. PRE-FUNDING ACCOUNT. (a) On the Closing Date, the Trustee will
deposit, on behalf of the Seller, in the Pre-Funding Account $30,419,091.02 from
the proceeds of the sale of the Notes and the Certificates. On each Subsequent
Transfer Date, the Servicer shall instruct the Trustee to withdraw from the
Pre-Funding Account an amount equal to the Principal Balance of the Subsequent
Receivables transferred to the Issuer on such Subsequent Transfer Date and to
distribute such amount to or upon the order of the Seller upon satisfaction of
the conditions set forth in this Agreement with respect to such transfer.
(b) If the Pre-Funded Amount has not been reduced to zero on the date on
which the Funding Period ends after giving effect to any reductions in the
Pre-Funded Amount on such date, the Servicer shall instruct the Trustee to
withdraw from the Pre-Funding Account on the Mandatory Redemption Date the Pre-
Funded Amount (exclusive of any Pre-Funding Earnings) and deposit an amount
equal to the Prepayment Amount in the Note Distribution Account.
SECTION 5.8. STATEMENTS TO CERTIFICATEHOLDERS AND Noteholders. On or prior
to each Determination Date, the Servicer shall provide to the Trustee (with a
copy to the Security Insurer and the Rating Agencies) for the Trustee to forward
to each Noteholder of record, to each Paying Agent, if any, and to the Owner
Trustee for the Owner Trustee to forward to each Certificateholder of record, a
statement substantially in the form of Exhibit B and Exhibit C, respectively,
setting forth at least the following information with respect to distributions
on the related Distribution Date as to the Notes and the Certificates to the
extent applicable:
(i) the amount of such distribution allocable to
principal of each Class of Notes and to the Certificate
Balance of the Certificates;
(ii) the amount of such distribution allocable to
interest on or with respect to each Class of Notes and to
the Certificates;
(iii) the amount of such distribution payable pursuant to a
claim on the Note Policy or the Certificate Policy and any remaining
outstanding balance available to be drawn under the applicable policy;
(iv) the Pool Balance as of the close of business on
the last day of the preceding Monthly Period;
(v) the aggregate outstanding principal amount of each Class
of the Notes, the Note Pool Factor for each such Class, the Certificate
Balance and the Certificate Pool Factor after giving effect to payments
allocated to principal reported under (i) above;
(vi) the amount of the Servicing Fee paid to the
Servicer with respect to the related Monthly Period and/or
due but unpaid with respect to such Monthly Period or
prior Monthly Periods, as the case may be;
(vii) the Noteholders' Interest Carryover Shortfall,
the Certificateholders' Interest Carryover Shortfall, the
Noteholders' Principal Carryover Shortfall, and the
Certificateholders' Principal Carryover Shortfall;
(viii) the amount of the aggregate Realized Losses,
if any, for the second preceding Monthly Period;
(ix) the aggregate Purchase Amounts for Receivables,
if any, that were repurchased in such period;
(x) for Distribution Dates during the Funding Period (if any),
the remaining Pre-Funded Amount, the amount in the Pre-Funding Account
and the amount remaining in the Capitalized Interest Account;
(xi) for the final Subsequent Transfer Date, the amount of any
remaining Pre-Funded Amount that has not been used to fund the purchase
of Subsequent Receivables and is passed through as principal to
Noteholders and Certificateholders;
(xii) the amounts which were collected by the
Servicer;
(xiii) the aggregate amount which was received by the
Trust from the Servicer;
(xiv) any reimbursements to the Security Insurer; and
(xv) delinquency information relating to Receivables which are
30, 60 or 90 days delinquent.
Each amount set forth pursuant to paragraph (i), (ii), (iii), (vii), (x)
and (xi) above shall be expressed as a dollar amount per $1,000 of the initial
principal balance of the Notes (or Class thereof) or the initial Certificate
Balance, as applicable.
SECTION 5.9. NET DEPOSITS. As an administrative convenience, unless the
Servicer is required to remit collections within two Business Days of receipt
thereof, the Servicer will be permitted to make the deposit of collections on
the Receivables and Purchase Amounts for or with respect to each Monthly Period
net of distributions to be made to the Servicer with respect to such Monthly
Period. The Servicer, however, will account to the Owner Trustee, the Trustee,
the Indenture Collateral Agent, the Noteholders and the Certificateholders as if
all deposits, distributions and transfers were made individually.
SECTION 5.10 OPTIONAL DEPOSITS BY THE SECURITY INSURER. The Security
Insurer shall at any time, and from time to time, with respect to a Distribution
Date, have the option (but shall not be required, except in accordance with the
terms of a Policy) to deliver amounts to the Trustee for deposit into the
Collection Account for any of the following purposes: (i) to provide funds in
respect of the payment of fees or expenses of any provider of services to the
Trust with respect to such Distribution Date, or (ii) to include such amount to
the extent that without such amount a draw would be required to be made on the
Note Policy or the Certificate Policy.
ARTICLE 5A
THE CERTIFICATE POLICY
SECTION 5A.1. CLAIMS UNDER POLICY. (a) In the event that the Trustee has
delivered a Deficiency Notice with respect to any Determination Date, if the
Certificate Insured Payment for the related Distribution Date is greater than
zero, the Owner Trustee shall furnish to the Security Insurer (with a copy to
the Servicer) a completed notice in the form set forth as an exhibit to the
Certificate Policy (the "Certificate Policy Notice") in accordance with the
terms of the Certificate Policy in the amount of the Certificate Insured
Payment. Amounts paid by the Security Insurer under the Certificate Policy shall
be deposited by the Owner Trustee into the Certificate Distribution Account for
payment to Certificateholders on the related Distribution Date (or promptly
following payment on a later date as set forth in the Certificate Policy). The
Certificate Insured Payment shall have the meaning as set forth in the
Certificate Policy.
(b) Any notice delivered by the Owner Trustee to the Security Insurer
pursuant to subsection 5A.1(a) shall specify the Certificate Insured Payment
claimed under the Certificate Policy and shall constitute a "Notice" under the
Certificate Policy. In accordance with the provisions of the Certificate Policy,
the Security Insurer is required to pay to the Owner Trustee the Certificate
Insured Payment properly claimed thereunder by 12:00 noon, New York City time,
on the later of (i) the second Business Day (as defined in the Certificate
Policy) following receipt on a Business Day (as defined in the Certificate
Policy) of the Certificate Policy Notice and (ii) the applicable Distribution
Date. Any payment made by the Security Insurer under the Certificate Policy
shall be applied solely to the payment of the Certificates, and for no other
purpose.
(c) The Owner Trustee shall (i) receive as attorney-in-fact of each
Certificateholder any Certificate Insured Payment from the Security Insurer and
(ii) deposit the same in the Certificate Distribution Account for disbursement
to the Certificateholders as set forth in the Trust Agreement. Any and all
Certificate Insured Payments disbursed by the Owner Trustee from claims made
under the Certificate Policy shall not be considered payment by the Trust with
respect to such Certificates, and shall not discharge the obligations of the
Trust with respect thereto. The Security Insurer shall, to the extent it makes
any payment with respect to the Certificates, become subrogated to the rights of
the recipients of such payments to the extent of such payments. Subject to and
conditioned upon any payment with respect to the Certificates by or on behalf of
the Security Insurer, the Owner Trustee shall assign to the Security Insurer all
rights to the payment of interest or principal with respect to the Certificates
which are then due for payment to the extent of all payments made by the
Security Insurer and the Security Insurer may exercise any option, vote, right,
power or the like with respect to the Certificates, to the extent that it has
made payment pursuant to the Certificate Policy. To evidence such subrogation,
the Certificate Registrar shall note the Security Insurer's rights as subrogee
upon the register of Certificateholders upon receipt from the Security Insurer
of proof of payment by the Security Insurer of any Certificateholders' Interest
Distributable Amount or Certificateholders' Principal Distributable Amount.
(d) The Owner Trustee shall be entitled to enforce on behalf of the
Certificateholders the obligations of the Security Insurer under the Certificate
Policy. Notwithstanding any other provision of this Agreement, the
Certificateholders are not entitled to make a claim directly under the
Certificate Policy or institute proceedings directly against the Security
Insurer.
SECTION 5A.2. PREFERENCE CLAIMS; DIRECTION OF PROCEEDINGS. (a) In the event
that the Owner Trustee has received a certified copy of a final non-appealable
order of the court of applicable jurisdiction that any Certificateholders'
Interest Distributable Amount or Certificateholders' Principal Distributable
Amount paid on a Certificate has been avoided in whole or in part as a
preference payment under the United States Bankruptcy Code (11 U.S.C.) (a
"Certificate Preference Amount"), the Owner Trustee shall so notify the Security
Insurer, shall comply with the provisions of the Certificate Policy to obtain
payment by the Security Insurer of such Certificate Preference Amount, and
shall, at the time it provides notice to the Security Insurer, notify Holders of
the Certificates by mail that, in the event that any Certificateholder's payment
is so recoverable, such Certificateholder will be entitled to payment pursuant
to the terms of the Certificate Policy. Pursuant to the terms of the Certificate
Policy, the Security Insurer will make such payment on behalf of the
Certificateholder in the manner set forth in the Certificate Policy.
(b) The Owner Trustee shall promptly notify the Security Insurer of any
proceeding or the institution of any action (of which a responsible officer of
the Owner Trustee has actual knowledge) seeking the avoidance as a preferential
transfer under applicable bankruptcy, insolvency, receivership, rehabilitation
or similar law (a "Preference Claim") of any distribution made with respect to
the Certificates. Each Holder, by its purchase of Certificates, and the Owner
Trustee hereby agree that so long as an Insurer Default shall not have occurred
and be continuing, the Security Insurer may at any time during the continuation
of any proceeding relating to a Preference Claim direct all matters relating to
such Preference Claim including, without limitation, (i) the direction of any
appeal of any order relating to any Preference Claim and (ii) the posting of any
surety, supersedeas or performance bond pending any such appeal at the expense
of the Security Insurer, but subject to reimbursement as provided in the
Insurance Agreement. In addition, and without limitation of the foregoing, as
set forth in Section 5A.1(c), the Security Insurer shall be subrogated to, and
each Certificateholder and the Owner Trustee hereby delegate and assign, to the
fullest extent permitted by law, the rights of the Owner Trustee and each
Certificateholder in the conduct of any proceeding with respect to a Preference
Claim, including, without limitation, all rights of any party to an adversary
proceeding action with respect to any court order issued in connection with any
such Preference Claim.
SECTION 5A.3. SURRENDER OF POLICY. The Owner Trustee shall surrender the
Certificate Policy to the Security Insurer for cancellation upon the expiration
of such policy in accordance with the terms thereof.
ARTICLE VI
THE SELLER
SECTION 6.1 REPRESENTATIONS OF THE SELLER. The Seller makes the following
representations on which the Security Insurer shall be deemed to have relied in
executing and delivering the Policies and on which the Issuer is deemed to have
relied in acquiring the Receivables. The representations speak as of the
execution and delivery of this Agreement and as of the Closing Date, in the case
of Initial Receivables, and as of the applicable Subsequent Transfer Date, in
the case of Subsequent Receivables, and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Trustee pursuant to the
Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Seller is duly organized and
validly existing as a corporation in good standing under the laws of the State
of Delaware with the corporate power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
presently conducted, and had at all relevant times, and has, the power,
authority and legal right to acquire and own the Receivables.
(b) DUE QUALIFICATION. The Seller is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of property,
including the Receivables, or the conduct of its business shall require such
qualifications.
(c) POWER AND AUTHORITY OF THE SELLER. The Seller has the corporate power
and authority to execute and deliver this Agreement and to perform its
obligations under each of the Basic Documents to which the Seller is a party;
the Seller has full corporate power and authority to sell and assign the
property to be sold and assigned to and deposited with the Issuer and the Seller
has duly authorized such sale and assignment to the Issuer by all necessary
corporate action; and the execution, delivery and performance of each of the
Basic Documents to which the Seller is a party and of each Subsequent Transfer
Agreement has been duly authorized by the Seller by all necessary corporate
action.
(d) BINDING OBLIGATION. This Agreement, each Subsequent Transfer Agreement
and each of the Basic Documents to which the Seller is a party constitute legal,
valid and binding obligations of the Seller, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, moratorium, fraudulent
conveyance, reorganization and similar laws now or hereafter in effect relating
to creditors' rights generally and subject to general principles of equity
(whether applied in a proceeding at law or in equity).
(e) NO VIOLATION. The consummation of the transactions contemplated by this
Agreement and by each Subsequent Transfer Agreement and the fulfillment of the
terms hereof and thereof do not result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time or both)
a default under, the articles of association or by-laws of the Seller, or any
indenture, agreement or other instrument to which the Seller is a party or by
which it is bound; nor result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than pursuant to the Basic Documents); nor violate any
law or, to the best of its knowledge, any order, rule or regulation applicable
to the Seller of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Seller or its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations pending
against the Seller or, to its best knowledge, threatened against the Seller,
before any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties: (i)
asserting the invalidity of this Agreement or any of the Basic Documents, the
Notes or the Certificates, (ii) seeking to prevent the issuance of the Notes or
the Certificates or the consummation of any of the transactions contemplated by
this Agreement or any of the Basic Documents, (iii) seeking any determination or
ruling that could reasonably be expected to have a material and adverse effect
on the performance by the Seller of its obligations under, or the validity or
enforceability of, the Basic Documents, the Notes or the Certificates or (iv)
that might adversely affect the federal income tax attributes of the Issuer, the
Notes or the Certificates.
(g) ALL CONSENTS. All authorizations, consents, orders or approvals of or
registrations or declarations with any court, regulatory body, administrative
agency or other government instrumentality required to be obtained, effected or
given by the Seller in connection with the execution and delivery by the Seller
of this Agreement, any Subsequent Transfer Agreement or any of the Basic
Documents to which it is a party and the performance by the Seller of the
transactions contemplated by this Agreement, any Subsequent Transfer Agreement
or any of the Basic Documents to which it is a party, have been duly obtained,
effected or given and are in full force and effect, except where failure to
obtain the same would not have a material and adverse effect upon the rights of
the Issuer, the Noteholders or the Certificateholders.
(h) CHIEF EXECUTIVE OFFICE. The chief executive office of the Seller is at
1625 West North Market Boulevard, Suite 210, Sacramento, California 95834.
SECTION 6.2. CORPORATE EXISTENCE. (a) During the term of this Agreement,
the Seller will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, any Subsequent
Transfer Agreement, the Basic Documents and each other instrument or agreement
necessary or appropriate to the proper administration of this Agreement and the
transactions contemplated hereby.
(b) During the term of this Agreement, the Seller shall observe the
applicable legal requirements for the recognition of the Seller as a legal
entity separate and apart from its Affiliates, including as follows:
(i) the Seller shall maintain corporate records and
books of account separate from those of its Affiliates;
(ii) except as otherwise provided in this Agreement,
the Seller shall not commingle its assets and funds with
those of its Affiliates;
(iii) the Seller shall hold such appropriate meetings of its
Board of Directors as are necessary to authorize all the Seller's
corporate actions required by law to be authorized by the Board of
Directors, shall keep minutes of such meetings and of meetings of its
stockholder(s) and observe all other customary corporate formalities
(and any successor Seller not a corporation shall observe similar
procedures in accordance with its governing documents and applicable
law);
(iv) the Seller shall at all times hold itself out to the
public under the Seller's own name as a legal entity separate and
distinct from its Affiliates; and
(v) all transactions and dealings between the Seller
and its Affiliates will be conducted on an arm's-length
basis.
SECTION 6.3. LIABILITY OF SELLER; INDEMNITIES. The Seller shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold harmless the Issuer, the
Owner Trustee, the Trust, the Security Insurer, the Trustee and the Indenture
Collateral Agent from and against any taxes that may at any time be asserted
against any such Person with respect to the transactions contemplated in this
Agreement and any of the Basic Documents (except any income taxes arising out of
fees paid to the Owner Trustee or the Trustee and except any taxes to which the
Owner Trustee or the Trustee may otherwise be subject to), including any sales,
gross receipts, general corporation, tangible personal property, privilege or
license taxes (but, in the case of the Issuer, not including any taxes asserted
with respect to, federal or other income taxes arising out of distributions on
the Certificates and the Notes) and costs and expenses in defending against the
same.
(b) The Seller shall indemnify, defend and hold harmless the Issuer, the
Owner Trustee, the Trustee, the Indenture Collateral Agent, the Security
Insurer, the Certificateholders and the Noteholders from and against any loss,
liability or expense incurred by reason of (i) the Seller's willful misfeasance,
bad faith or negligence in the performance of its duties under this Agreement,
or by reason of reckless disregard of its obligations and duties under this
Agreement and (ii) the Seller's or the Issuer's violation of Federal or state
securities laws in connection with the offering and sale of the Notes and the
Certificates.
(c) The Seller shall indemnify, defend and hold harmless the Owner Trustee
and its officers, directors, employees and agents from and against any and all
costs, expenses, losses, claims, damages and liabilities arising out of, or
incurred in connection with the acceptance or performance of the trusts and
duties set forth herein and in the Basic Documents except to the extent that
such cost, expense, loss, claim, damage or liability shall be due to the willful
misfeasance, bad faith or negligence (except for errors in judgment) of the
Owner Trustee.
Indemnification under this Section shall survive the resignation or removal
of the Owner Trustee, the Trustee or the Indenture Collateral Agent and the
termination of this Agreement, the Indenture or the Trust Agreement, as
applicable, and shall include reasonable fees and expenses of counsel and other
expenses of litigation. If the Seller shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter shall collect any of such amounts from others, such Person
shall promptly repay such amounts to the Seller, without interest.
SECTION 6.4. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, SELLER. Any Person (a) into which the Seller may be merged or consolidated,
(b) which may result from any merger or consolidation to which the Seller shall
be a party or (c) which may succeed to the properties and assets of the Seller
substantially as a whole, which Person in any of the foregoing cases executes an
agreement of assumption to perform every obligation of the Seller under this
Agreement, shall be the successor to the Seller hereunder without the execution
or filing of any document or any further act by any of the parties to this
Agreement; provided, however, that (i) the Seller shall have received the
written consent of the Security Insurer prior to entering into any such
transaction, (ii) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 3.1 shall have been breached
and no Servicer Default, and no event which, after notice or lapse of time, or
both, would become a Servicer Default shall have happened and be continuing,
(iii) the Seller shall have delivered to the Owner Trustee, the Trustee and the
Security Insurer an Officer's Certificate and an Opinion of Counsel each stating
that such consolidation, merger or succession and such agreement of assumption
comply with this Section and that all conditions precedent, if any, provided for
in this Agreement relating to such transaction have been complied with, (iv) the
Rating Agency Condition shall have been satisfied with respect to such
transaction and (v) the Seller shall have delivered to the Owner Trustee, the
Trustee and the Security Insurer an Opinion of Counsel stating that, in the
opinion of such counsel, either (A) all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary fully to preserve and protect the interest of the Owner Trustee and
the Trustee, respectively, in the Receivables and reciting the details of such
filings or (B) no such action shall be necessary to preserve and protect such
interest. Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (i), (ii), (iii),
(iv) and (v) above shall be conditions to the consummation of the transactions
referred to in clauses (a), (b) or (c) above.
SECTION 6.5. LIMITATION ON LIABILITY OF SELLER AND OTHERS. The Seller and
any director or officer or employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
under any Basic Document. The Seller shall not be under any obligation to appear
in, prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in any
expense or liability.
SECTION 6.6. SELLER MAY OWN CERTIFICATES OR NOTES. The Seller and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates or Notes with the same rights as it would have if it
were not the Seller or an Affiliate thereof, except as expressly provided herein
or in any Basic Document. Notes or Certificates so owned by the Seller or such
Affiliate shall have an equal and proportionate benefit under the provisions of
the Basic Documents, without preference, priority, or distinction as among all
of the Notes or Certificates, PROVIDED, HOWEVER, that any Notes or Certificates
owned by the Seller or any Affiliate thereof, during the time such Notes or
Certificates are owned by them, shall be without voting rights for any purpose
set forth in the Basic Documents and will not be entitled to the benefits of the
Policies. The Seller shall notify the Owner Trustee, the Trustee and the
Security Insurer promptly after it or any of its Affiliates become the owner of
a Certificate or a Note.
ARTICLE VII
THE SERVICER
SECTION 7.1. REPRESENTATIONS OF SERVICER. The Servicer makes the following
representations on which the Security Insurer shall be deemed to have relied in
executing and delivering the Policies and on which the Issuer is deemed to have
relied in acquiring the Receivables. The representations speak as of the
execution and delivery of this Agreement and as of the Closing Date, in the case
of the Initial Receivables, and as of the applicable Subsequent Transfer Date,
in the case of the Subsequent Receivables, and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Trustee pursuant to the
Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Servicer is duly organized and
validly existing as a corporation in good standing under the laws of the state
of its incorporation, with the corporate power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the power, authority and legal right to acquire, own, sell and service the
Receivables and to hold the Receivable Files as custodian.
(b) DUE QUALIFICATION. The Servicer is duly qualified to do business and
has obtained all necessary licenses and approvals in all jurisdictions in which
the ownership or lease of property or the conduct of its business (including the
servicing of the Receivables as required by this Agreement) shall require such
qualifications, and was duly qualified and had all licenses in all relevant
jurisdictions required for the origination of the Receivables.
(c) POWER AND AUTHORITY OF THE SERVICER. The Servicer has the corporate
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder, and the execution, delivery and performance of this
Agreement have been duly authorized by the Servicer by all necessary corporate
action. All authorizations, consents, orders or approvals of or registrations or
declarations with any court, regulatory body, administrative agency or other
government instrumentality required to be obtained, effected or given by the
Servicer in connection with the execution and delivery by the Servicer of this
Agreement or any of the Basic Documents to which it is a party and the
performance by the Servicer of the transactions contemplated by this Agreement
or any of the Basic Documents to which it is a party, have been duly obtained,
effected or given and are in full force and effect, except where failure to
obtain the same would not have a material adverse effect upon the rights of the
Issuer, the Noteholders or the Certificateholders.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Servicer, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws now or hereafter in effect relating to
creditors' rights generally, and subject to general principles of equity
(whether applied in a proceeding at law or in equity).
(e) NO VIOLATION. The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not result in any breach of
any of the terms and provisions of, or constitute (with or without notice or
lapse of time) a default under the articles of incorporation or by-laws of the
Servicer, or any indenture, agreement or other instrument to which the Servicer
is a party or by which it shall be bound; or result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement or other instrument (other than pursuant to the Basic
Documents); or violate any law or, to the best of the Servicer's knowledge, any
order, rule or regulation applicable to the Servicer of any court or of any
federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations pending
against the Servicer, or, to its best knowledge, threatened against the
Servicer, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or its
properties: (i) asserting the invalidity of this Agreement or any of the Basic
Documents, the Notes or the Certificates, (ii) seeking to prevent the issuance
of the Notes or the Certificates or the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Servicer of its obligations under, or the validity or
enforceability of this Agreement or any of the Basic Documents, the Notes or the
Certificates or (iv) relating to the Servicer and which might adversely affect
the federal income tax or ERISA attributes of the Issuer, the Notes or the
Certificates.
(g) NO INSOLVENT OBLIGORS. As of the Initial Cutoff Date, no Obligor on an
Initial Receivable, and as of each Subsequent Cutoff Date, no Obligor on a
Subsequent Receivable being transferred on the related Subsequent Transfer Date,
shall be shown on the related Receivable Files as the subject of a bankruptcy
proceeding commenced following the execution of the related Contract.
SECTION 7.2. INDEMNITIES OF SERVICER. (a) The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement and the representations made by
the Servicer herein.
(a) The Servicer shall defend, indemnify and hold harmless the Owner
Trustee, the Trustee, the Trust, the Indenture Collateral Agent, the Security
Insurer, the Noteholders, the Certificateholders and the Seller from and against
any and all costs, expenses, losses, damages, claims, and liabilities, arising
out of or resulting from the use, ownership or operation by the Servicer or any
Affiliate thereof of a Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the Owner
Trustee, the Trustee, the Seller, the Trust, the Indenture Collateral Agent, the
Security Insurer, their respective officers, directors, agents and employees and
the Noteholders and the Certificateholders from and against any and all costs,
expenses, losses, claims, damages, and liabilities to the extent that such cost,
expense, loss, claim, damage, or liability arose out of, or was imposed upon any
such Person through, the negligence, willful misfeasance or bad faith of the
Servicer in the performance of its duties under this Agreement or by reason of
reckless disregard of its obligations and duties under this Agreement.
(c) The Servicer shall indemnify, defend and hold harmless the Owner
Trustee and its officers, directors, employees and agents from and against all
costs, expenses, losses, claims, damages and liabilities arising out of or
incurred in connection with the acceptance or performance of the trusts and
duties herein and in the Trust Agreement contained, except to the extent that
such costs, expense, loss, claim, damage or liability shall be due to the
willful misfeasance, bad faith or negligence (except for errors in judgment) of
the Owner Trustee.
For purposes of this Section, in the event of the termination of the rights
and obligations of TMS Auto Finance (or any successor thereto pursuant to
Section 7.3) as Servicer pursuant to Section 8.1, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer (other than the Trustee)
pursuant to Section 8.2.
Indemnification under this Section shall survive the resignation or removal
of the Owner Trustee or the Trustee or the termination of this Agreement, the
Indenture or the Trust Agreement, as applicable, and shall include reasonable
fees and expenses of counsel and expenses of litigation. If the Servicer shall
have made any indemnity payments pursuant to this Section and the recipient
thereafter collects any of such amounts from others, such Person shall promptly
repay such amounts to the Servicer, without interest.
SECTION 7.3. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, SERVICER. Any Person (a) into which the Servicer may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Servicer shall be a party or (c) which may succeed to the properties and assets
of the Servicer, substantially as a whole or (d) with respect to the Servicer's
obligations hereunder, which is a corporation 50% or more of the voting stock of
which is owned, directly or indirectly, by The Money Store Inc., which Person
executed an agreement of assumption to perform every obligation of the Servicer
hereunder shall be the successor to the Servicer under the Agreement without
further act on the part of any of the parties to the Agreement; PROVIDED,
however, that (i) the Servicer shall have received the written consent of the
Security Insurer prior to entering into any such transaction; (ii) immediately
after giving effect to such transaction, no Servicer Default and no event which,
after notice or lapse of time, or both, would become a Servicer Default shall
have happened and be continuing, (iii) the Servicer shall have delivered to the
Owner Trustee and the Trustee an Officer's Certificate and an Opinion of Counsel
each stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent provided
for in this Agreement relating to such transaction have been complied with, (iv)
the Rating Agency Condition shall have been satisfied with respect to such
transaction and (v) the Servicer shall have delivered to the Owner Trustee and
the Trustee an Opinion of Counsel stating that, in the opinion of such counsel,
either (A) all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary fully to preserve and
protect the interest of the Owner Trustee and the Trustee in the Receivables and
reciting the details of such filings or (B) no such action shall be necessary to
preserve and protect such interest. Notwithstanding anything herein to the
contrary, the execution of the foregoing agreement of assumption and compliance
with clauses (i), (ii), (iii), (iv) and (v) above shall be conditions to the
consummation of the transactions referred to in clauses (a), (b), (c) or (d)
above.
SECTION 7.4. LIMITATION ON LIABILITY OF SERVICER AND Others. Neither the
Servicer nor any of its directors, officers, employees or agents shall be under
any liability to the Issuer, the Noteholders or the Certificateholders, except
as provided under this Agreement, for any action taken or for refraining from
the taking of any action pursuant to this Agreement or for errors in judgment;
PROVIDED, HOWEVER, that this provision shall not protect the Servicer or any
such person against any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties under this Agreement. The
Servicer or any subservicer and any of their respective directors, officers,
employees or agents may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not be
incidental to its duties to service the Receivables in accordance with this
Agreement, and that in its opinion may involve it in any expense or liability;
PROVIDED, HOWEVER, that the Servicer, may (but shall not be required to)
undertake any reasonable action that it may deem necessary or desirable to
protect the interests of the Certificateholders under the Trust Agreement and
the Noteholders under the Indenture.
SECTION 7.5. SERVICER NOT TO RESIGN. Subject to the provisions of Section
7.3, the Servicer may not resign from the obligations and duties hereby imposed
on it as Servicer under this Agreement except upon determination that by reason
of a change in legal requirements the performance of its duties under this
Agreement would cause it to be in violation of such legal requirements in a
manner which would result in a material adverse effect on the Servicer and the
Security Insurer does not elect to waive the obligations of the Servicer to
perform the duties which render it legally unable to act or does not elect to
delegate those duties to another Person. Notice of any such determination
permitting the resignation of the Servicer shall be communicated to the Owner
Trustee, the Trustee and the Security Insurer at the earliest practicable time
(and, if such communication is not in writing, shall be confirmed in writing at
the earliest practicable time) and any such determination shall be evidenced by
an Opinion of Counsel to such effect delivered to and satisfactory to the Owner
Trustee, the Trustee and the Security Insurer concurrently with or promptly
after such notice. No such resignation of the Servicer shall become effective
until a successor servicer shall have assumed the responsibilities and
obligations of TMS Auto Finance in accordance with Section 8.2 of this
Agreement.
ARTICLE VIII
DEFAULT
SECTION 8.1. SERVICER DEFAULT. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) Any failure by the Servicer to deliver to the Owner
Trustee or Trustee for deposit in any of the Trust Accounts or the
Certificate Distribution Account any payment required to be so
delivered under the terms of the
Notes, the Certificates or this Agreement that shall continue
unremedied for a period of five Business Days after written notice of
such failure is received by the Servicer from the Security Insurer, the
Owner Trustee or the Trustee or after discovery of such failure by an
Officer of the Servicer; or
(b) Failure by the Servicer duly to observe or to perform in
any material respect any other covenants or agreements of the Servicer
or the Seller (as the case may be) set forth in the Notes, the
Certificates, this Agreement or any other Basic Document, which failure
shall (i) materially and adversely affect the rights of either the
Certificateholders or the Noteholders and (ii) continue unremedied for
a period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given (A)
to the Servicer by the Security Insurer, the Owner Trustee or the
Trustee or (B) to the Servicer, the Owner Trustee and the Trustee by
the Holders of Notes evidencing not less than 25% of the outstanding
principal amount of the Notes or Holders of Certificates evidencing not
less than 25% of the outstanding Certificate Balance, as applicable (or
for such longer period, not in excess of 120 days, as may be reasonably
necessary to remedy such default; provided that such default is capable
of remedy within 120 days and the Servicer delivers an Officers'
Certificate to the Security Insurer, the Owner Trustee and the Trustee
to such effect and to the effect that the Servicer has commenced or
will promptly commence, and will diligently pursue, all reasonable
efforts to remedy such default); or
(c) An Insolvency Event occurs with respect to the
Servicer or any successor; or
(d) So long as an Insurer Default shall not have occurred and
be continuing, an Insurance Agreement Event of Default described in
Section 5.01 of the Insurance Agreement shall have occurred;
then, and in each and every case, (i) so long as no Insurer Default shall
have occurred and be continuing, the Trustee may, with the consent of the
Security Insurer and at the direction of the Security Insurer, the Trustee
shall, subject to subsection (b) of this Section 8.1, except in the case of an
event arising under Section 5.01(c) of the Insurance Agreement or (ii) if an
Insurer Default shall have occurred and be continuing, any of the Trustee or the
Holders of Notes evidencing not less than a majority of the principal amount of
the Notes then outstanding, or the Holders (as defined in the Trust Agreement)
of Certificates evidencing not less than a majority of the outstanding
Certificate Balance, as applicable, in the case of any default which does not
adversely affect the Trustee or the Noteholders, in any case by notice given in
writing to the Servicer (and to the Trustee if given by the Security Insurer or,
as applicable, the Noteholders or the Certificateholders) may terminate all of
the rights and obligations of the Servicer under this Agreement. For purposes of
Section 8.1(d), any determination of an adverse effect on the interest of the
Certificateholders or the Noteholders pursuant to Section 8.1(b) shall be made
without consideration of the availability of funds under the Policies. On or
after the receipt by the Servicer of such written notice, all authority, power,
obligations and responsibilities of the Servicer under this Agreement, whether
with respect to the Notes, the Certificates or the Receivables or otherwise,
automatically shall pass to, be vested in and become obligations and
responsibilities of the Trustee provided that the Trustee is not unwilling or
unable to act; PROVIDED, HOWEVER, that the Trustee shall have no liability with
respect to any obligation which was required to be performed by the prior
Servicer prior to the date that the Trustee becomes the Servicer or any claim of
a third party based on any alleged action or inaction of the prior Servicer. The
Trustee is authorized and empowered by this Agreement, as successor Servicer to
execute and deliver, on behalf of the prior Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement of the
Receivables and the other Trust Property and related documents, to show the
Owner Trustee as lienholder or secured party on the related Lien Certificates,
or otherwise. The prior Servicer agrees to cooperate with the successor Servicer
in effecting the termination of the responsibilities and rights of the prior
Servicer under this Agreement, including, without limitation, the transfer to
the successor Servicer for administration by it of all cash amounts that shall
at the time be held by the prior Servicer for deposit, or have been deposited by
the prior Servicer, in the Collection Account or thereafter received with
respect to the Receivables and the delivery to the successor Servicer of all
Receivables Files, records and a computer tape in readable form containing all
information necessary to enable the successor Servicer to service the
Receivables and the other Trust Property. The terminated Servicer shall grant
the Trustee, (in its capacity as Trustee and/or successor Servicer), the Owner
Trustee and the Security Insurer reasonable access to the terminated Servicer's
premises at the Servicer's expense.
SECTION 8.2. APPOINTMENT OF SUCCESSOR. (a) Upon the Servicer's receipt of
notice of termination, pursuant to Section 8.1 or the Servicer's resignation in
accordance with the terms of this Agreement, the predecessor Servicer shall
continue to perform its functions as Servicer under this Agreement, in the case
of termination, only until the date specified in such termination notice or, if
no such date is specified in a notice of termination, until receipt of such
notice and, in the case of resignation, until the later of (x) the date 45 days
from the delivery to the Owner Trustee and the Trustee of written notice of such
resignation (or written confirmation of such notice) in accordance with the
terms of this Agreement and (y) the date upon which the predecessor Servicer
shall become unable to act as Servicer, as specified in the notice of
resignation and accompanying Opinion of Counsel. In the event of the Servicer's
termination hereunder, the Trustee shall, provided it is not unwilling or unable
to act, assume the obligations of Servicer hereunder, and shall accept its
appointment by a written assumption in form acceptable to the Security Insurer.
Notwithstanding the above, the Trustee, with the prior written consent of the
Security Insurer, or the Security Insurer shall, if the Trustee shall be
unwilling or legally unable so to act, appoint, or petition a court of competent
jurisdiction to appoint, any established institution having a net worth of not
less than $50,000,000 and whose regular business shall include the servicing of
automotive receivables as the successor to the Servicer under the Agreement. Any
successor Servicer shall be acceptable to the Security Insurer.
(b) Upon appointment, the successor Servicer (including the Trustee acting
as successor Servicer) shall be the successor in all respects to the predecessor
Servicer and shall be subject to all the responsibilities, duties and
liabilities arising thereafter relating thereto placed on the predecessor
Servicer, subject to the exceptions set forth in Section 8.2(a) hereof, and
shall be entitled to the Servicing Fee and all the rights granted to the
predecessor Servicer by the terms and provisions of this Agreement.
SECTION 8.3. [RESERVED]
SECTION 8.4. NOTIFICATION TO NOTEHOLDERS AND CERTIFICATEHOLDERS. Upon any
termination of, or appointment of a successor to, the Servicer pursuant to this
Article VIII, the Owner Trustee shall give prompt written notice thereof to
Certificateholders, the Security Insurer and the Trustee shall give prompt
written notice thereof to Noteholders and to the Rating Agencies.
SECTION 8.5. WAIVER OF PAST DEFAULTS. So long as no Insurer Default shall
have occurred and be continuing, the Security Insurer (or, if an Insurer Default
shall have occurred and be continuing, the Holders of Notes evidencing not less
than a majority of the outstanding principal amount of the Notes, or the Holders
(as defined in the Trust Agreement) of Certificates evidencing not less than a
majority of the outstanding Certificate Balance, as applicable, in the case of
any default which does not adversely affect the Trustee or the Noteholders) may,
on behalf of all Noteholders and Certificateholders, waive any default by the
Servicer in the performance of its obligations hereunder and its consequences,
except a default in making any required deposits to or payments from any of the
Trust Accounts in accordance with this Agreement. Upon any such waiver of a past
default, such default shall cease to exist, and any Servicer Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto.
ARTICLE IX
TERMINATION
SECTION 9.1. OPTIONAL PURCHASE OF ALL RECEIVABLES. (a) On the last day of
any Monthly Period as of which the Pool Balance shall be less than or equal to
10% of the Original Pool Balance, the Servicer shall have the option to purchase
the Owner Trust Estate, other than the Trust Accounts and the Certificate
Distribution Account (with the consent of the Security Insurer if such purchase
would result in a claim on either Policy or would result in any amount owing to
the Security Insurer under the Insurance Agreement remaining unpaid); PROVIDED,
HOWEVER, that the amount to be paid for such purchase (as set forth in the
following sentence) shall be sufficient to pay the full amount of principal,
premium, if any, and interest then due and payable on the Notes and the
Certificates. To exercise such option, the Servicer shall deposit pursuant to
Section 5.5 in the Collection Account an amount equal to the aggregate Purchase
Amount for the Receivables (including Defaulted Receivables), plus any amounts
then due and owing to the Security Insurer plus the appraised value of any other
property held by the Trust, such value to be determined by an appraiser mutually
agreed upon by the Servicer, the Security Insurer, the Owner Trustee and the
Trustee, and shall succeed to all interests in and to the Trust.
(b) Upon any sale of the assets of the Trust pursuant to Section 9.2 of the
Trust Agreement, the Servicer shall instruct the Trustee to deposit the proceeds
from such sale after all payments and reserves therefrom (including the expenses
of such sale) have been made (the "Insolvency Proceeds") in the Collection
Account. On the Distribution Date on which the Insolvency Proceeds are deposited
in the Collection Account (or, if such proceeds are not so deposited on a
Distribution Date, on the Distribution Date immediately following such deposit),
the Servicer shall instruct the Trustee to make, and the Trustee shall make, the
following deposits and distributions (after the application on such Distribution
Date of the Distribution Amount pursuant to Section 5.6(b)) from the Insolvency
Proceeds and the Distribution Amount for such Distribution Date:
(i) to the Note Distribution Account, any portion of
the Noteholders' Interest Distributable Amount not
otherwise deposited into the Note Distribution Account on
such Distribution Date;
(ii) to the Note Distribution Account, the outstanding
principal amount of the Notes (after giving effect to the reduction in
the outstanding principal amount of the Notes to result from the
deposits made in the Note Distribution Account on such Distribution
Date);
(iii) to the Owner Trustee for deposit in the Certificate
Distribution Account, any portion of the Certificateholders' Interest
Distributable Amount not otherwise deposited into the Certificate
Distribution Account on such Distribution Date; and
(iv) to the Owner Trustee for deposit in the Certificate
Distribution Account, the Certificate Balance and any
Certificateholders' Principal Carryover Shortfall Amount (after giving
effect to the reduction in the Certificate Balance to result from the
deposits made in the Certificate Distribution Account on such
Distribution
Date).
Any Insolvency Proceeds remaining after the deposits described above shall
be paid first to the Security Insurer to the extent of any amounts owing to the
Security Insurer under the Insurance Agreement and not paid, and second, to the
extent of any remaining funds, to the General Partner.
(c) Notice of any termination of the Trust shall be given by the Servicer
to the Owner Trustee, the Trustee, the Security Insurer and the Rating Agencies
as soon as practicable after the Servicer has received notice thereof.
(d) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder and
the Owner Trustee will succeed to the rights of, and assume the obligations of,
the Trustee pursuant to this Agreement.
ARTICLE X
ADMINISTRATIVE DUTIES OF THE SERVICER
SECTION 10.1 ADMINISTRATIVE DUTIES. (a) DUTIES WITH RESPECT TO THE
INDENTURE AND DEPOSITORY AGREEMENTS. The Servicer shall perform all its duties
and the duties of the Issuer under the Indenture and the Depository Agreements.
In addition, the Servicer shall consult with the Owner Trustee as the Servicer
deems appropriate regarding the duties of the Issuer under the Indenture and the
Depository Agreements. The Servicer shall monitor the performance of the Issuer
and shall advise the Owner Trustee when action is necessary to comply with the
Issuer's duties under the Indenture and the Depository Agreements. The Servicer
shall prepare for execution by the Issuer or shall cause the preparation by
other appropriate Persons of all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Issuer to prepare, file
or deliver pursuant to the Indenture and the Depository Agreements. In
furtherance of the foregoing, the Servicer shall take all necessary action that
is the duty of the Issuer to take pursuant to the Indenture and the Depository
Agreements, including, without limitation, pursuant to Sections 2.7, 3.5, 3.6,
3.7, 3.9, 7.2, 7.3, 11.1 and 11.15 of the Indenture.
(b) DUTIES WITH RESPECT TO THE ISSUER.
(i) In addition to the duties of the Servicer set
forth in this Agreement or any of the Basic Documents, the
Servicer shall perform such calculations and shall prepare for
execution by the Issuer or the Owner Trustee or shall cause the
preparation by other appropriate Persons of all such documents,
reports, filings, instruments, certificates and opinions as it shall be
the duty of the Issuer or the Owner Trustee to prepare, file or deliver
pursuant to this Agreement or any of the Basic Documents, and at the
request of the Owner Trustee shall take all appropriate action that it
is the duty of the Issuer to take pursuant to this Agreement or any of
the Basic Documents, including, without limitation, pursuant to
Sections 2.6 and 2.11 of the Trust Agreement. In accordance with the
directions of the Issuer or the Owner Trustee, the Servicer shall
administer, perform or supervise the performance of such other
activities in connection with the Collateral (including the Basic
Documents) as are not covered by any of the foregoing provisions and as
are expressly requested by the Issuer or
the Owner Trustee and are reasonably within the
capability of the Servicer.
(ii) Notwithstanding anything in this Agreement or any of the
Basic Documents to the contrary, the Servicer shall be responsible for
promptly notifying the Owner Trustee in the event that any withholding
tax is imposed on the Issuer's payments (or allocations of income) to
an
Owner (as defined in the Trust Agreement) as contemplated
in Section 5.2(f) of the Trust Agreement. Any such
notice shall be in writing and specify the amount of any withholding
tax required to be withheld by the Owner Trustee pursuant to such
provision.
(iii) Notwithstanding anything in this Agreement or
the Basic Documents to the contrary, the Servicer shall be
responsible for performance of the duties of the Issuer
or the Owner Trustee and the General Partner set forth in
Section 5.6(a), (b), (c) and (d) of the Trust Agreement with respect
to, among other things, accounting and reports to Owners (as defined in
the Trust Agreement); PROVIDED, HOWEVER, that once prepared by the
Servicer the Owner Trustee shall retain responsibility for the
distribution of the Schedule K-1s necessary to enable each
Certificateholder to prepare its federal and state income tax returns.
(iv) The Servicer shall perform the duties of the Servicer
specified in Section 10.2 of the Trust Agreement required to be
performed in connection with the resignation or removal of the Owner
Trustee, and any other duties expressly required to be performed by the
Servicer under this Agreement or any of the Basic Documents.
(v) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Servicer may enter into
transactions with or otherwise deal with any of its Affiliates;
PROVIDED, HOWEVER, that the terms of any such transactions or dealings
shall be in accordance with any directions received from the Issuer and
shall be, in the Servicer's opinion, no less favorable to the Issuer in
any material respect.
(c) TAX MATTERS. The Servicer shall prepare and file, on behalf of the
General Partner, all tax returns, tax elections, financial statements and such
annual or other reports of the Issuer as are necessary for preparation of tax
reports as provided in Article V of the Trust Agreement, including without
limitation Forms 1099 and 1066. All tax returns will be signed by the General
Partner.
(d) NON-MINISTERIAL MATTERS. With respect to matters that in the reasonable
judgment of the Servicer are non-ministerial, the Servicer shall not take any
action pursuant to this Article X unless within a reasonable time before the
taking of such action, the Servicer shall have notified the Owner Trustee and
the Trustee of the proposed action and the Owner Trustee and, with respect to
items (A), (B), (C) and (D) below, the Trustee shall not have withheld consent
or provided an alternative direction. For the purpose of the preceding sentence,
"non-ministerial matters" shall include:
(A) the amendment of or any supplement to the
Indenture;
(B) the initiation of any claim or lawsuit by
the Issuer and the compromise of any action, claim or
lawsuit brought by or against the Issuer (other than
in connection with the collection of the
Receivables);
(C) the amendment, change or modification of
this Agreement or any of the Basic Documents;
(D) the appointment of successor Note
Registrars, successor Paying Agents and successor
Trustees pursuant to the Indenture or the appointment
of Successor Servicers or the consent to the
assignment by the Note Registrar, Paying Agent or
Trustee of its obligations under the Indenture; and
(E) the removal of the Trustee.
(e) EXCEPTIONS. Notwithstanding anything to the
contrary in this Agreement, except as expressly provided herein
or in the other Basic Documents, the Servicer, in its capacity
hereunder, shall not be obligated to, and shall not, (1) make
any payments to the Noteholders or Certificateholders under the
Basic Documents, (2) sell the Owner Trust Estate pursuant to
Section 5.5 of the Indenture, (3) take any other action that the Issuer directs
the Servicer not to take on its behalf or (4) in connection with its duties
hereunder assume any indemnification obligation of any other Person.
SECTION 10.2. RECORDS. The Servicer shall maintain appropriate books of
account and records relating to services performed under this Agreement, which
books of account and records shall be accessible for inspection by the Issuer at
any time during normal business hours.
SECTION 10.3 ADDITIONAL INFORMATION TO BE FURNISHED TO THE ISSUER. The
Servicer shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1 AMENDMENT. This Agreement may be amended from time to time by
the Representative, the Seller, the Servicer and the Owner Trustee, with the
consent of the Trustee (which consent may not be unreasonably withheld), with
the prior written consent of the Security Insurer (so long as no Insurer Default
has occurred and is continuing) but without the consent of any of the
Noteholders or the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement, to comply with any changes in the
Code, or to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be inconsistent with the provisions
of this Agreement or the Insurance Agreement; PROVIDED, HOWEVER, that such
action shall not, as evidenced by an Opinion of Counsel delivered to the Owner
Trustee and the Trustee, adversely affect in any material respect the interests
of any Noteholder or Certificateholder; provided further that if an Insurer
Default has occurred and is continuing, such action shall not materially
adversely affect the interests of the Security Insurer in the Trust.
This Agreement may also be amended from time to time by the Representative,
the Seller, the Servicer and the Owner Trustee, with the consent of the Security
Insurer (so long as no Insurer Default has occurred and is continuing), the
consent of the Trustee, the consent of the Holders of Notes evidencing not less
than a majority of the outstanding principal amount of the Notes and the consent
of the Holders (as defined in the Trust Agreement) of Certificates evidencing
not less than a majority of the Certificate Balance for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders; PROVIDED, HOWEVER, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables or distributions that shall be
required to be made for the benefit of the Noteholders or the Certificateholders
or (b) reduce the aforesaid percentage of the outstanding principal amount of
the Notes and the Certificate Balance, the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all the
outstanding Notes and the Holders (as defined in the Trust Agreement) of all the
outstanding Certificates, of each class affected thereby; provided further, that
if an Insurer Default has occurred and is continuing, such action shall not
materially adversely affect the interest of the Security Insurer.
Promptly after the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to each Certificateholder and the Rating Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents (and any
other consents of Noteholders or Certificateholders provided for in this
Agreement) and of evidencing the authorization of any action by Noteholders or
Certificateholders shall be subject to such reasonable requirements as the
Trustee or the Owner Trustee, as applicable, may prescribe.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee, the Trustee and the Security Insurer shall be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred to
in Section 11.2(i)(1) has been delivered. The Owner Trustee and the Trustee may,
but shall not be obligated to, enter into any such amendment which affects the
Issuer's, the Owner Trustee's or the Trustee's, as applicable, own rights,
duties or immunities under this Agreement or otherwise.
SECTION 11.2 PROTECTION OF TITLE TO TRUST. (a) The Seller shall execute and
file such financing statements and cause to be executed and filed such
continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer and the interests of the Indenture Collateral Agent on behalf of the
Noteholders, the Certificateholders and the Security Insurer in the Receivables
and in the proceeds thereof. The Seller shall deliver (or cause to be delivered)
to the Security Insurer, the Owner Trustee and the Indenture Collateral Agent
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) Neither the Seller nor the Servicer shall change its name, identity or
corporate structure in any manner that would, could or might make any financing
statement or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of Section 9-402(7) of the UCC, unless
it shall have given the Security Insurer, the Owner Trustee and the Trustee at
least five days' prior written notice thereof and shall have promptly filed
appropriate amendments to all previously filed financing statements or
continuation statements. Promptly upon such filing, the Seller or the Servicer,
as the case may be, shall deliver an Opinion of Counsel in form and substance
reasonably satisfactory to the Security Insurer, stating either (A) all
financing statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the Trust and
the Trustee in the Receivables, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such details are given, or (B)
no such action shall be necessary to preserve and protect such interest.
(c) Each of the Seller and the Servicer shall have an obligation to give
the Security Insurer, the Owner Trustee and the Trustee at least 60 days' prior
written notice of any relocation of its principal executive office if, as a
result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly file any such
amendment. The Servicer shall at all times maintain each office from which it
shall service Receivables, and its principal executive office, within the United
States of America.
(d) The Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Receivable, including payments and recoveries made
and payments owing (and the nature of each) and (ii) reconciliation between
payments or recoveries on (or with respect to) each Receivable and the amounts
from time to time deposited in the Collection Account in respect of such
Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables to the Issuer,
the Servicer's master computer records (including any backup archives) that
refer to a Receivable shall indicate clearly the interest of the Issuer and the
Trustee on behalf of the Certificateholders, the Noteholders and the Security
Insurer in such Receivable and that such Receivable is owned by the Issuer and
has been pledged to the Trustee. Indication of the Issuer's and the Trustee's
interest in a Receivable shall be deleted from or modified on the Servicer's
computer systems when, and only when, the related Receivable shall have been
paid in full or repurchased.
(f) If at any time the Seller or the Servicer shall propose to sell, grant
a security interest in or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or printouts (including any restored from backup
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been sold and is owned by the
Issuer and has been pledged to the Trustee on behalf of the Certificateholders,
the Noteholders and the Security Insurer.
(g) The Servicer shall permit the Trustee and the Security Insurer and
their respective agents at any time during normal business hours to inspect,
audit and make copies of and abstracts from the Servicer's records regarding any
Receivable or any other portion of the Trust Property. The preceding sentence
shall not create any duty or obligation on the part of the Trustee to perform
any such acts.
(h) Upon request, the Servicer shall furnish to the Security Insurer, the
Owner Trustee or to the Trustee, within five Business Days, a list of all
Receivables (by contract number and name of Obligor) then held as part of the
Trust, together with a reconciliation of such list to the Schedule of
Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Security Insurer, the Owner Trustee
and the Trustee:
(j) promptly after the execution and delivery of the Agreement
and, if required pursuant to Section 11.1, of each amendment, an
Opinion of Counsel stating that, in the opinion of such Counsel, in
form and substance reasonably satisfactory to the Security Insurer,
either (A) all financing statements and continuation statements have
been executed and filed that are necessary fully to preserve and
protect the interest of the Trust and the Trustee in the
Receivables, and reciting the details of such filings or referring
to prior Opinions of Counsel in which such details are given, or (B)
no such action shall be necessary to preserve and protect such
interest; and
(2) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Cutoff Date, an
Opinion of Counsel, dated as of a date during such 90-day period,
stating that, in the opinion of such counsel,
either (A) all financing statements and continuation
statements have been executed and filed that are necessary
fully to preserve and protect the interest of the Trust and the
Trustee in the Receivables, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such details are given,
or (B) no such action shall be necessary to preserve and protect such
interest.
Each Opinion of Counsel referred to in clause (l) or (2) above
shall specify any action necessary (as of the date of
such opinion) to be taken in the following year to preserve
and protect such interest.
(j) The Seller shall, to the extent required by applicable law, cause the
Certificates and the Notes to be registered with the Commission pursuant to
Section 12(b) or Section 12(g) of the Exchange Act within the time periods
specified in such sections.
SECTION 11.3 NOTICES. All demands, notices and communications upon or to
the Seller, the Servicer, the Owner Trustee, the Trustee or the Rating Agencies
under this Agreement shall be in writing, personally delivered, or mailed by
certified mail, return receipt requested, and shall be deemed to have been duly
given upon receipt (a) in the case of the Seller to TMS Auto Holdings, Inc.,
1625 West North Market Blvd., Suite 210, Sacramento, California 95834,
Attention: Executive Vice President with a copy to: The Money Store Inc., 2840
Morris Ave., Union, New Jersey, 07083, Attention: Executive Vice President (b)
in the case of the Servicer to The Money Store Auto Finance Inc., 1625 West
North Market Blvd., Suite 210, Sacramento, California 95834, Attention:
President, with a copy to: The Money Store Inc., 2840 Morris Ave., Union, New
Jersey, 07083, Attention: Executive Vice President (c) in the case of the Issuer
or the Owner Trustee, at the Corporate Trust Office of the Owner Trustee, with a
copy to Bankers Trust Company, 4 Albany Street, New York, New York 10006,
Attention: Corporate Trust Agency, Structured Finance, 10th floor, (d) in the
case of the Trustee or the Indenture Collateral Agent, at the Corporate Trust
Office, (e) in the case of the Security Insurer, to MBIA Insurance Corporation,
113 King Street, Armonk, New York 10504, Attention: Insured Portfolio
Management-SF; (f) in the case of Moody's, to Moody's Investors Service, Inc.,
ABS Monitoring Department, 99 Church Street, New York, New York 10007; and (g)
in the case of Standard & Poor's, to Standard & Poor's Ratings Group, 25
Broadway - 15th Floor, New York, New York 10004, Attention: Asset Backed
Surveillance Department. Any notice required or permitted to be mailed to a
Noteholder or Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register or
Note Register, as applicable. Any notice so mailed within the time prescribed in
the Agreement shall be conclusively presumed to have been duly given, whether or
not the Certificateholder or Noteholder shall receive such notice.
SECTION 11.4. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.4 and 7.3 and as provided in
the provisions of this Agreement concerning the resignation of the Servicer,
this Agreement may not be assigned by the Seller or the Servicer without the
prior written consent of the Owner Trustee, the Trustee and the Security Insurer
(or if an Insurer Default shall have occurred and be continuing the Holders of
Notes evidencing not less than 66% of the principal amount of the outstanding
Notes and the Holders of Certificates evidencing not less than 66% of the
Certificate Balance).
SECTION 11.5. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Seller, the Servicer, the Issuer,
the Owner Trustee and for the benefit of the Certificateholders (including the
General Partner), the Trustee, the Security Insurer and the Noteholders, as
third-party beneficiaries. Nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person, other than express
third-party beneficiaries, any legal or equitable right, remedy or claim in the
Owner Trust Estate or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.
SECTION 11.6. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.7. SEPARATE COUNTERPARTS. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.8. HEADINGS. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 11.9. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.10. ASSIGNMENT TO TRUSTEE. The Seller hereby acknowledges and
consents to any mortgage, pledge, assignment and grant of a security interest by
the Issuer to the Trustee pursuant to the Indenture for the benefit of the
Issuer Secured Parties (as defined in the Indenture) of all right, title and
interest of the Issuer in, to and under the Receivables and/or the assignment of
any or all of the Issuer's rights and obligations hereunder to the Trustee.
SECTION 11.11. NONPETITION COVENANTS. (a) Notwithstanding any prior
termination of this Agreement, the parties hereto shall not, prior to the date
which is one year and one day after the termination of this Agreement with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Issuer to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Issuer under any federal
or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement, the parties
hereto shall not, prior to the date that is one year and one day after the
termination of this Agreement with respect to the Seller, acquiesce to, petition
or otherwise invoke or cause the Seller to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Seller under any federal or state bankruptcy, insolvency or similar law,
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator,
or other similar official of the Seller or any substantial part of its property,
or ordering the winding up or liquidation of the affairs of the Seller.
SECTION 11.12. LIMITATION OF LIABILITY OF OWNER TRUSTEE, TRUSTEE AND
INDENTURE COLLATERAL AGENT. (a) Notwithstanding anything contained herein to the
contrary, this Agreement has been countersigned by Bankers Trust (Delaware) not
in its individual capacity but solely in its capacity as Owner Trustee of the
Issuer and in no event shall Bankers Trust (Delaware) in its individual capacity
or, except as expressly provided in the Trust Agreement, as Owner Trustee have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder or in any of the certificates, notices
or agreements delivered pursuant hereto, as to all of which recourse shall be
had solely to the assets of the Issuer. For all purposes of this Agreement, in
the performance of its duties or obligations hereunder or in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by The Chase Manhattan Bank, not in its individual
capacity but solely as Trustee and as Indenture Collateral Agent, and in no
event shall The Chase Manhattan Bank have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered pursuant hereto,
as to all of which recourse shall be had solely to the assets of the Issuer.
SECTION 11.13. INDEPENDENCE OF THE SERVICER. For all purposes of this
Agreement, the Servicer shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Owner Trustee with respect to
the manner in which it accomplishes the performance of its obligations
hereunder. Unless expressly authorized by the Issuer, the Servicer shall have no
authority to act for or represent the Issuer or the Owner Trustee in any way and
shall not otherwise be deemed an agent of the Issuer or the Owner Trustee.
SECTION 11.14. NO JOINT VENTURE. Nothing contained in this Agreement (i)
shall constitute the Servicer and either of the Issuer or the Owner Trustee as
members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
SECTION 11.15. THIRD-PARTY BENEFICIARIES. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. The Security Insurer and its successors and
assigns shall be a third-party beneficiary to the provisions of this Agreement,
and shall be entitled to rely upon and directly to enforce such provisions of
this Agreement so long as no Insurer Default shall have occurred and be
continuing. Except as expressly stated otherwise herein or in the Basic
Documents, any right of the Security Insurer to direct, appoint, consent to,
approve of, or take any action under this Agreement, shall be a right exercised
by the Security Insurer in its sole and absolute discretion.
SECTION 11.16. DISCLAIMER BY SECURITY INSURER. The Security Insurer may
disclaim any of its rights and powers under this Agreement (but not its duties
and obligations under the Policies) upon delivery of a written notice to the
Owner Trustee and the Trustee.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective duly authorized
officers as of the day and year first above written.
THE MONEY STORE AUTO TRUST 1997-2
By BANKERS TRUST (DELAWARE),
not in its individual capacity
but solely as Owner Trustee on
behalf of the Trust,
By___________________________________
Name:
Title:
TMS AUTO HOLDINGS, INC.,
Seller,
By_____________________________________
Name:
Title:
THE MONEY STORE AUTO FINANCE INC.,
Servicer,
By_____________________________________
Name:
Title:
THE MONEY STORE INC.,
Representative,
By_____________________________________
Name:
Title:
Acknowledged and Accepted:
THE CHASE MANHATTAN BANK, not
in its individual capacity
but solely as Trustee,
By___________________________
Name:
Title:
Acknowledged and Accepted:
BANKERS TRUST (DELAWARE),
not in its individual capacity
but solely as Owner Trustee,
By____________________________
Name:
Title:
Acknowledged and Accepted:
THE CHASE MANHATTAN BANK, not
in its individual capacity
but solely as Indenture Collateral
Agent
By____________________________
Name:
Title:
<PAGE>
SCHEDULE A
SCHEDULE OF RECEIVABLES
<PAGE>
SCHEDULE B
LOCATION OF RECEIVABLES
The Money Store Inc.
625 West North Market Boulevard
Suite 210
Sacramento, CA 95834
<PAGE>
EXHIBIT A
SUBSEQUENT TRANSFER AGREEMENT
TRANSFER No. OF SUBSEQUENT RECEIVABLES dated as of , 1997,
among THE MONEY STORE AUTO TRUST 1997-2, a Delaware business trust (the
"Issuer"), TMS AUTO HOLDINGS, INC., a Delaware corporation (the "Seller"), THE
MONEY STORE AUTO FINANCE INC. a Delaware corporation (the "Servicer"), and THE
MONEY STORE INC., a New Jersey corporation (the "Representative") pursuant to
the Sale and Servicing Agreement referred to below.
W I T N E S E T H:
WHEREAS the Issuer, the Seller, the Servicer and the
Representative are parties to the Sale and Servicing Agreement,
dated as of May 31, 1997 (as amended or supplemented, the
"Sale and Servicing Agreement");
WHEREAS pursuant to the Sale and Servicing Agreement,
the Seller wishes to convey the Subsequent Receivables to the
Issuer; and
WHEREAS, the Issuer is willing to accept such conveyance
subject to the terms and conditions hereof.
NOW, THEREFORE, the Issuer, the Seller and the Servicer hereby
agree as follows:
l. DEFINED TERMS. Capitalized terms used herein
shall have the meanings ascribed to them in the Sale and
Servicing Agreement unless otherwise defined herein.
"SUBSEQUENT CUTOFF DATE" shall mean, with respect to the
Subsequent Receivables conveyed hereby, ____________, 1997.
"SUBSEQUENT TRANSFER DATE" shall mean, with respect to the
Subsequent Receivables conveyed hereby, , 1997.
2. SCHEDULE OF RECEIVABLES. Annexed hereto is a
supplement to Schedule A to the Sale and Servicing Agreement
listing the Receivables that constitute the Subsequent
Receivables to be conveyed pursuant to this Agreement on the
Subsequent Transfer Date.
3. CONVEYANCE OF SUBSEQUENT RECEIVABLES. In consideration of
the Issuer's delivery to or upon the order of the Seller of $ , the Seller does
hereby sell, transfer, assign, set over and otherwise convey to the Issuer,
without recourse (except as expressly provided in the Sale and Servicing
Agreement), all right, title and interest of the Seller in and to:
(a) the Subsequent Receivables, and all moneys due
thereon, on or after the related Subsequent Cutoff Date;
(b) the security interests in the Financed Vehicles
granted by Obligors pursuant to the Subsequent Receivables
and any other interest of the Seller in such Financed
Vehicles;
(c) any proceeds with respect to the Subsequent Receivables
from claims on any physical damage, credit life or disability insurance
policies covering Financed Vehicles or Obligors;
(d) any proceeds with respect to the Subsequent Receivables
from recourse to Dealers in respect to which the Servicer has
determined in accordance with its customary servicing procedures that
eventual payment in full is unlikely;
(e) the related Receivables Files;
(f) its rights and benefits, but none of its
obligations or burdens, under the Subsequent Transfer
Agreement, including the delivery requirements,
representations and warranties and the cure and repurchase
obligations of TMS Auto Finance under the Subsequent
Purchase Agreement, on or after the Subsequent Cutoff
Date; and
(g) the proceeds of any and all of the foregoing.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller hereby represents and warrants to the Issuer as of
the date of this Agreement and as of the Subsequent Transfer
Date that:
(a) LEGAL, VALID AND BINDING OBLIGATION. This Agreement
constitutes a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or equity).
(b) ORGANIZATION AND GOOD STANDING. The Seller is
duly organized and validly existing as a corporation in
good standing under the laws of the State of Delaware,
with the power and authority to own its properties and to
conduct its business as such properties are currently owned and such
business is presently conducted, and had at all relevant times, and
has, the power, authority and legal right to acquire and own the
Receivables.
(c) DUE QUALIFICATION. The Seller is duly qualified
to do business as a foreign corporation in good standing,
and has obtained all necessary licenses and approvals in
all jurisdictions in which the ownership or lease of
property or the conduct of its business shall require such
qualifications.
(d) POWER AND AUTHORITY. The Seller has the power
and authority to execute and deliver this Agreement and to
carry out its terms; the Seller has full power and authority to sell
and assign the property to be sold and assigned to and deposited with
the Issuer and the Seller and shall have duly authorized such sale and
assignment to
the Issuer by all necessary corporate action; and the execution,
delivery and performance of this Agreement has been duly authorized by
the Seller by all necessary corporate action.
(e) BINDING OBLIGATION. This Agreement constitutes
a legal, valid and binding obligation of the Seller
enforceable in accordance with its terms.
(f) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
do not conflict with, result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time)
a default under, the articles of incorporation or by-laws of the
Seller, or any indenture, agreement or other instrument to which the
Seller is a party or by which it shall be bound; nor result in the
creation or imposition of any Lien upon any of its properties pursuant
to the terms of any such indenture, agreement or other instrument
(other than pursuant to the Basic Documents); nor violate any law or,
to the best of the Seller's knowledge, any order, rule or regulation
applicable to the Seller of any court or of any federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties.
(g) NO PROCEEDINGS. To the Seller's best knowledge,
there are no proceedings or investigations pending, or
threatened, before any court, regulatory body, administra tive agency
or other governmental instrumentality having jurisdiction over the
Seller or its properties: (i) asserting the invalidity of this
Agreement, the Indenture or any of the other Basic Documents, the Notes
or the Certificates, (ii) seeking to prevent the issuance of the Notes
or the Certificates or the consummation of any of the transactions
contemplated by this Agreement, the Indenture or any of the other Basic
Documents, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, this
Agreement, the Indenture, any of the other Basic Documents, the Notes
or the Certificates or (iv) which might adversely affect the Federal or
state income tax attributes of the Notes or the Certificates.
(h) PRINCIPAL BALANCE. The aggregate Principal
Balance of the Receivables listed on the supplement to
Schedule A annexed hereto and conveyed to the Issuer
pursuant to this Agreement as of the Subsequent Cutoff
Date is $ .
5. CONDITIONS PRECEDENT. The obligation of the
Issuer to acquire the Receivables hereunder is subject to the
satisfaction, on or prior to the Subsequent Transfer Date, of
the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the Seller in
Section 4 of this Agreement and in Section 3.1 of the Sale
and Servicing Agreement shall be true and correct as of the date of
this Agreement and as of the Subsequent Transfer Date.
(b) SALE AND SERVICING AGREEMENT CONDITIONS. Each
of the conditions set forth in Section 2.2(b) to the Sale
and Servicing Agreement shall have been satisfied.
(c) ADDITIONAL INFORMATION. The Seller shall have
delivered to the Issuer such information as was reasonably
requested by the Issuer to satisfy itself as to (i) the
accuracy of the representations and warranties set forth in Section 4
of this Agreement and in Section 3.1 of the Sale and Servicing
Agreement and (ii) the satisfaction of the conditions set forth in this
Section 5.
6. RATIFICATION OF AGREEMENT. As supplemented by this
Agreement, the Sale and Servicing Agreement is in all respects ratified and
confirmed and the Sale and Servicing Agreement as so supplemented by this
Agreement shall be read, taken and construed as one and the same instrument.
7. COUNTERPARTS. This Agreement may be executed in
two or more counterparts (and by different parties in separate
counterparts), each of which shall be an original but all of
which together shall constitute one and the same instrument.
8. GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
9. THIRD PARTY BENEFICIARY. The Security Insurer is
an express third party beneficiary of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the Issuer, the Seller and the Servicer
have caused this Agreement to be duly executed and delivered by their respective
duly authorized officers as of the day and the year first above written.
THE MONEY STORE AUTO TRUST 1997-2
by BANKERS TRUST (DELAWARE)
not in its individual
capacity but solely as Owner
Trustee on behalf of the Trust,
by___________________________
Title:
TMS AUTO HOLDINGS, INC.
Seller,
by_________________________
Title:
THE MONEY STORE AUTO
FINANCE INC.
Servicer,
by_________________________
Title:
THE MONEY STORE INC.,
Representative
by_________________________
Title:
Acknowledged and Accepted:
THE CHASE MANHATTAN BANK,
not in its individual
capacity but solely as
Trustee and Indenture
Collateral Agent
by__________________________________
Title:
<PAGE>
Exhibit B
FORM OF MONTHLY CERTIFICATEHOLDER STATEMENT
THE MONEY STORE AUTO TRUST 1997-2
6.64% Asset Backed Certificates
Distribution Date:
Monthly Period:
Under the Sale and Servicing Agreement dated as of May 31, 1997 among The
Money Store Auto Finance, as Servicer, TMS Auto Holdings, Inc., as seller, The
Money Store Auto Trust 1997-2, as issuer, and The Money Store Inc., as
representative, the Servicer is required to prepare certain information each
month regarding current distributions to Certificateholders and the performance
of the Trust during the previous month. The information that is required to be
prepared with respect to the Distribution Date and Monthly Period listed above
is set forth below. Certain of the information is presented on the basis of an
original principal amount of $1,000 per Certificate, and certain other
information is presented based upon the aggregate amounts for the Trust as a
whole.
A. Information Regarding the Current Monthly Distribution.
1. Certificates.
(a) The aggregate amount of the
distribution to the Certificateholders............$________
(b) The amount of the distribution set
forth in paragraph A.1.(a) above in
respect of interest on the Certificates...........$________
(c) The amount of the distribution set
forth in paragraph A.1.(a) above in
respect of principal of the Certificates..........$________
(d) The amount of the distribution in
A.1.(a) payable pursuant to a claim
on the Certificate Policy.........................$________
(e) The remaining outstanding balance
available to be drawn under the
Certificate Policy................................$________
(f) The amount of the distribution set
forth in paragraph A.1.(a) above
per $1,000 interest in the Certificates...........$________
(g) The amount of the distribution set
forth in paragraph A.1.(b) above
per $1,000 interest in the Certificates...........$________
(h) The amount of the distribution set
forth in paragraph A.1.(c) above
per $1,000 interest in the Certificates...........$________
(i) The amount of the distribution set
forth in paragraph A.1.(d) above
per $1,000 interest in the Certificates...........$________
B. Information Regarding the Performance of the Trust.
1. Pool Balance and Certificate Principal Balance.
(a) The Pool Balance at the close of business on
the last day of the Monthly Period................$________
(b) The Certificate Principal Balance after
giving effect to payments allocated to
principal as set forth in Paragraph A.1(c)........$________
(c) The Certificate Pool Factor after
giving affect to the payments set
forth in paragraph A.1(c).........................$________
(d) The amount of aggregate Realized Losses for the second
preceding Monthly Period..........................$________
(e) The aggregate Purchase Amount for
all Receivables that were repurchased
in the Monthly Period.............................$________
2. Servicing Fee.
The aggregate amount of the Servicing
Fee paid to the Servicer with respect
to the preceding Monthly Period...................$________
3. Payment Shortfalls.
(a) The amount of the Certificateholders'
Interest Carryover Shortfall after giving
effect to the payments set forth in
paragraph A.1(b) above............................$________
(b) The amount of the Certificateholders'
Interest Carryover Shortfall set forth
in paragraph B.3.(a) above per $1,000
interest with respect to the Certificate:.........$________
(c) The amount of the Certificateholders'
Principal Carryover Shortfall after giving
effect to the payments set forth in
paragraph A.1(b) above............................$________
(d) The amount of the Certificateholders'
Principal Carryover Shortfall set forth
in paragraph B.3.(a) above per $1,000
interest with respect to the Certificate:.........$________
4. Transfer of Subsequent Receivables
[(a) Aggregate amount on deposit in the Pre- Funding Account on such
Distribution Date after giving effect to all withdrawals
therefrom on such Distribution
Date..............................................$______]
[(b) Aggregate amount on deposit in the Capitalized Interest Account
on such Distribution Date after giving effect to all withdrawals
therefrom on such
Distribution Date................................$______]
[(c) Aggregate amount on deposit in the Pre-Funding Account on the
final Subsequent Transfer Date after giving effect to all
withdrawals therefrom on
such Distribution Date...........................$______]
[(d) The amount set forth in paragraph B.4(a)
per $1,000 interest in the Certificates:.........$______]
[(e) The amount set forth in paragraph B.4(b)
to be distributed to Certificateholders
per $1,000 interest in the Certificates:.........$______]
[(f) The amount set forth in paragraph B.4(c)
to be distributed to Certificateholders
per $1,000 interest in the Certificates:.........$______]
5. (a) The aggregate amount of collections by
the Servicer during the preceding
Monthly Period...................................$______
(b) The aggregate amount which was received
by the Trust from the Servicer during the
preceding Monthly Period.........................$______
(c) The aggregate amount of reimbursements
to the Security Insurer during the
preceding Monthly Period.........................$______
(d) The number of Receivables that are delinquent for
over:
.........................................30 days.____
.........................................60 days.____
.........................................90 days.____
<PAGE>
Exhibit C
FORM OF MONTHLY NOTEHOLDER STATEMENT
THE MONEY STORE AUTO TRUST 1997-2
Class A-1 6.17% Asset Backed Notes
Class A-2 6.495% Asset Backed Notes
Distribution Date:
Monthly Period:
Under the Sale and Servicing Agreement dated as of May 31, 1997 among
The Money Store Auto Finance, as Servicer, TMS Auto Holdings, Inc., as seller,
The Money Store Auto Trust 1997-2,
as issuer, and The Money Store Inc., as representative, the Servicer is required
to prepare certain information each month regarding current distributions to
Noteholders and the performance of the Trust during the previous month. The
information that is required to be prepared with respect to the
Distribution Date and Monthly Period listed above is set forth
below. Certain of the information is presented on the basis
of an original principal amount of $1,000 per Note, and certain other
information is presented based upon the aggregate amounts for the Trust as a
whole.
A. Information Regarding the Current Monthly Distribution.
1. Notes.
(a) The aggregate amount of the
distribution with respect to:
the Class A-1 Notes..................$________
the Class A-2 Notes..................$________
(b) The amount of the distribution set
forth in paragraph A.1.(a) above in
respect of interest on:
the Class A-1 Notes..................$________
the Class A-2 Notes..................$________
(c) The amount of the distribution set
forth in paragraph A.1.(a) above in
respect of principal of:
the Class A-1 Notes..................$________
the Class A-2 Notes..................$________
(d) The amount of the distribution in
A.1.(a) payable pursuant to a claim
on the Note Policy with respect to:
the Class A-1 Notes..................$_______
the Class A-2 Notes..................$_______
(e) The remaining outstanding balance
available to be drawn under the
Note Policy...................................$_______
(f) The amount of the distribution set
forth in paragraph A.1.(a) above
per $1,000 interest in:
the Class A-1 Notes.......................$________
the Class A-2 Notes.......................$________
(g) The amount of the distribution set
forth in paragraph A.1.(b) above
per $1,000 interest in:
the Class A-1 Notes.......................$________
the Class A-2 Notes.......................$________
(h) The amount of the distribution set
forth in paragraph A.1.(c) above
per $1,000 interest in:
the Class A-1 Notes.......................$________
the Class A-2 Notes.......................$________
(i) The amount of the distribution set
forth in paragraph A.1.(d) above
per $1,000 interest in:
the Class A-1 Notes.......................$________
the Class A-2 Notes.......................$________
B. Information Regarding the Performance of the Trust.
1. Pool Balance and Note Principal Balance.
(a) The Pool Balance at the close of business on
the last day of the Monthly Period.................$_____
(b) The aggregate outstanding principal amount of each Class of
Notes after giving effect to payments allocated to principal as
set forth in Paragraph A.1(c) above with respect to:
the Class A-1 Notes.......................$________
the Class A-2 Notes.......................$________
(c) The Note Pool Factor for each Class of Notes
after giving affect to the payments set forth
in paragraph A.1(c) with respect to:
the Class A-1 Notes.......................________
the Class A-2 Notes.......................________
(d) The amount of aggregate Realized Losses for
the second preceding Monthly Period................________
(e) The aggregate Purchase Amount for
all Receivables that were repurchased
in the Monthly Period..............................________
2. Servicing Fee.
The aggregate amount of the Servicing
Fee paid to the Servicer with respect
to the preceding Monthly Period....................$_______
3. Payment Shortfalls.
(a) The amount of the Noteholders' Interest Carryover Shortfall
after giving effect to the payments set forth in paragraph
A.1(b) above with respect to:
the Class A-1 Notes.......................$________
the Class A-2 Notes.......................$________
(b) The amount of the Noteholders' Interest Carryover Shortfall set
forth in paragraph B.3.(a) above per $1,000 interest with
respect to:
the Class A-1 Notes.......................$________
the Class A-2 Notes.......................$________
(c) The amount of the Noteholders' Principal Carryover Shortfall
after giving effect to the payments set forth in paragraph
A.1(b) above with respect to:
the Class A-1 Notes.......................$________
the Class A-2 Notes.......................$________
(d) The amount of the Noteholders' Principal Carryover Shortfall set
forth in paragraph B.3.(a) above per $1,000 interest with
respect to:
the Class A-1 Notes.......................$________
the Class A-2 Notes.......................$________
4. (a) The aggregate amount of collections by
the Servicer during the preceding
Monthly Period.....................................$______
(b) The aggregate amount which was received by
the Trust from the Servicer during the
preceding Monthly Period...........................$______
(c) The aggregate amount of reimbursements to
the Security Insurer during the preceding
Monthly Period.....................................$______
(d) The number of Receivables that are delinquent
for over:
....................................30 days...______
....................................60 days...______
....................................90 days...______
<PAGE>
Exhibit D
Form of Servicer's Certificate
<PAGE>
Exhibit E
Form of Note Policy
<PAGE>
Exhibit F
Form of Stamp
THIS CONTRACT/NOTE IS SUBJECT TO A
SECURITY INTEREST GRANTED TO THE
CHASE MANHATTAN BANK, AS TRUSTEE, FOR WHICH UCC-1
FINANCING STATEMENTS HAVE BEEN FILED WITH THE
SECRETARY OF STATE OF DELAWARE. AS THE LIEN WILL BE
RELEASED ONLY BY FILINGS IN SUCH OFFICES, PURCHASE
DOCUMENTS MUST REFER TO SUCH FILINGS TO DETERMINE
WHETHER THE LIEN HAS BEEN RELEASED.
THE MONEY STORE AUTO TRUST 1997-2
$160,000,000 CLASS A-1 6.17% Asset Backed Notes
$60,500,000 CLASS A-2 6.495% Asset Backed Notes
--------------------------------
INDENTURE
Dated as of May 31, 1997
------------------------------
THE CHASE MANHATTAN BANK
Trustee and Indenture Collateral Agent
<PAGE>
CROSS REFERENCE TABLE
TIA Indenture
Section Section
310 (a) (1) ................................... 6.11
(a) (2) ................................... 6.11
(a) (3) ................................... 6.10; 6.11
(a) (4) ................................... N.A.
(a) (5) ................................... 6.11
(b) ................................... 6.8; 6.11
(c) ................................... N.A.
311 (a) ................................... 6.12
(b) ................................... 6.12
(c) ................................... N.A.
312 (a) ................................... 7.1
(b) ................................... 7.2
(c) ................................... 7.2
313 (a) ................................... 7.4
(b) (1) ................................... 7.4
(b) (2) ................................... 7.4
(c) ................................... 11.5
(d) ................................... 7.3
314 (a) ................................... 3.9; 7.3
(b) ................................... 11.15
(c) (1) ................................... 11.1
(c) (2) ................................... 11.1
(c) (3) ................................... 11.1
(d) ................................... 11.1
(e) ................................... 1.1; 11.1
(f) ................................... 11.1
315 (a) ................................... 6.1
(b) ................................... 6.5; 11.5
(c) ................................... 6.1
(d) ................................... 6.1
(e) ................................... 5.14
316 (a) (last sentence) .......................... 1.1
(a) (1)(A).................................... 5.12
(a) (1)(B).................................... 5.13
(a) (2) ................................... N.A.
(b) ................................... 5.7; 5.8
(c) ................................... N.A
317 (a) (1) ................................... 5.3
(a) (2) ................................... 5.3
(b) ................................... 3.3
318 (a) ................................... 11.7
(b) ................................... N.A.
(c) ................................... 11.7
- -------------------
1 Note: This Cross Reference Table shall not, for any
purpose, be deemed to be part of this Indenture.
2. N.A. means Not Applicable.
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1 Definitions..........................................3
SECTION 1.2 Incorporation by Reference of Trust
Indenture Act.......................................14
SECTION 1.3. Rules of Construction...............................15
ARTICLE II
The Notes
SECTION 2.1. Form................................................15
SECTION 2.2. Execution, Authentication and Delivery.............16
SECTION 2.3. Temporary Notes.....................................16
SECTION 2.4. Registration; Registration of Transfer
and Exchange........................................17
SECTION 2.5. Mutilated, Destroyed, Lost or Stolen
Notes...............................................18
SECTION 2.6. Persons Deemed Owner................................19
SECTION 2.7. Payment of Principal and Interest;
Defaulted Interest..................................20
SECTION 2.8. Cancellation........................................21
SECTION 2.9. Release of Collateral...............................22
SECTION 2.10. Book-Entry Notes....................................22
SECTION 2.11. Notices to Clearing Agency..........................23
SECTION 2.12. Definitive Notes....................................23
ARTICLE III
Covenants
SECTION 3.1. Payment of Principal and Interest...................24
SECTION 3.2. Maintenance of Office or Agency.....................24
SECTION 3.3. Money for Payments To Be Held in Trust.............25
SECTION 3.4. Existence...........................................27
SECTION 3.5. Protection of Trust Estate..........................27
SECTION 3.6. Opinions as to Trust Estate.........................28
SECTION 3.7. Performance of Obligations; Servicing
of Receivables......................................29
SECTION 3.8. Negative Covenants..................................30
SECTION 3.9. Annual Statement as to Compliance...................31
SECTION 3.10. Issuer May Consolidate, Etc. Only on
Certain Terms.......................................31
SECTION 3.11. Successor or Transferee.............................34
SECTION 3.12. No Other Business...................................34
SECTION 3.13. No Borrowing........................................35
SECTION 3.14. Servicer's Obligations..............................35
SECTION 3.15. Guarantees, Loans, Advances and Other
Liabilities.........................................35
SECTION 3.16. Capital Expenditures................................35
SECTION 3.17 Compliance with Laws................................35
SECTION 3.18. Restricted Payments.................................35
SECTION 3.19. Notice of Events of Default.........................36
SECTION 3.20. Further Instruments and Acts........................36
SECTION 3.21. Amendments of Sale and Servicing
Agreement and Trust Agreement.......................36
SECTION 3.22. Income Tax Characterization.........................36
ARTICLE IV
tisfaction and Discharge
SECTION 4.1. Satisfaction and Discharge of
Indenture............................................36
SECTION 4.2. Application of Trust Money...........................38
SECTION 4.3. Repayment of Moneys Held by Paying
Agent................................................38
ARTICLE V
Remedies
SECTION 5.1. Events of Default....................................39
SECTION 5.2. Rights Upon Event of Default.........................41
SECTION 5.3. Collection of Indebtedness and Suits
for Enforcement by Trustee...........................42
SECTION 5.4. Remedies.............................................46
SECTION 5.5. Optional Preservation of the
Receivables..........................................47
SECTION 5.6. Priorities...........................................47
SECTION 5.7. Limitation of Suits..................................49
SECTION 5.8. Unconditional Rights of Noteholders To
Receive Principal and Interest.......................50
SECTION 5.9. Restoration of Rights and Remedies...................50
SECTION 5.10. Rights and Remedies Cumulative.......................50
SECTION 5.11. Delay or Omission Not a Waiver.......................50
SECTION 5.12. Control by Noteholders...............................51
SECTION 5.13. Waiver of Past Defaults..............................51
SECTION 5.14. Undertaking for Costs................................52
SECTION 5.15. Waiver of Stay or Extension Laws.....................52
SECTION 5.16. Action on Notes......................................53
SECTION 5.17. Performance and Enforcement of Certain
Obligations..........................................54
SECTION 5.18. Claims Under Note Policy.............................53
SECTION 5.19. Preference Claims....................................55
ARTICLE VI
The Trustee and the Indenture Collateral Agent
SECTION 6.1. Duties of Trustee....................................56
SECTION 6.2. Rights of Trustee....................................58
SECTION 6.3. Individual Rights of Trustee.........................60
SECTION 6.4. Trustee's Disclaimer.................................60
SECTION 6.5. Notice of Defaults...................................60
SECTION 6.6. Reports by Trustee to Holders........................60
SECTION 6.7. Compensation and Indemnity...........................60
SECTION 6.8. Replacement of Trustee...............................61
SECTION 6.9. Successor Trustee by Merger..........................63
SECTION 6.10. Appointment of Co-Trustee or Separate
Trustee64
SECTION 6.11. Eligibility; Disqualification........................65
SECTION 6.12. Preferential Collection of Claims
Against Issuer.......................................66
SECTION 6.13. Appointment and Powers...............................66
SECTION 6.14. Performance of Duties................................66
SECTION 6.15. Limitation on Liability..............................67
SECTION 6.16. Reliance Upon Documents..............................68
SECTION 6.17. Successor Indenture Collateral Agent................68
SECTION 6.18. Compensation.........................................70
SECTION 6.19. Representations and Warranties of the
Indenture Collateral Agent...........................70
SECTION 6.20. Waiver of Setoffs....................................70
SECTION 6.21. Control by the Controlling Party.....................71
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.1. Issuer To Furnish To Trustee Names and
Addresses of Noteholders.............................71
SECTION 7.2. Preservation of Information;
Communications to Noteholders........................71
SECTION 7.3. Reports by Issuer....................................72
SECTION 7.4. Reports by Trustee...................................72
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.1. Collection of Money..................................73
SECTION 8.2. Trust Accounts.......................................73
SECTION 8.3. General Provisions Regarding Accounts...............74
SECTION 8.4. Release of Trust Estate..............................75
SECTION 8.5. Opinion of Counsel...................................75
ARTICLE IX
Supplemental Indentures
SECTION 9.1. Supplemental Indentures Without
Consent of Noteholders..............................76
SECTION 9.2. Supplemental Indentures with Consent
of Noteholders......................................77
SECTION 9.3. Execution of Supplemental Indentures...............79
SECTION 9.4. Effect of Supplemental Indenture....................80
SECTION 9.5. Conformity With Trust Indenture Act................80
SECTION 9.6. Reference in Notes to Supplemental
Indentures..........................................80
ARTICLE X
Redemption of Notes
SECTION 10.1. Redemption..........................................80
SECTION 10.2 Form of Redemption Notice...........................81
SECTION 10.3. Notes Payable on Redemption Date....................82
ARTICLE XI
Miscellaneous
SECTION 11.1 Compliance Certificates and Opinions,
etc................................................82
SECTION 11.2. Form of Documents Delivered to Trustee............85
SECTION 11.3. Acts of Noteholders................................86
SECTION 11.4. Notices, etc., to Trustee, Issuer and
Rating Agencies86
SECTION 11.5. Notices to Noteholders; Waiver.....................87
SECTION 11.6. Alternate Payment and Notice
Provisions.........................................88
SECTION 11.7. Conflict with Trust Indenture Act..................88
SECTION 11.8. Effect of Headings and Table of
Contents...........................................89
SECTION 11.9. Successors and Assigns.............................89
SECTION 11.10. Separability.......................................89
SECTION 11.11. Benefits of Indenture..............................89
SECTION 11.12. Legal Holidays.....................................89
SECTION 11.13. GOVERNING LAW......................................90
SECTION 11.14. Counterparts.......................................90
SECTION 11.15. Recording of Indenture.............................90
SECTION 11.16. Trust Obligation...................................90
SECTION 11.17. No Petition........................................91
SECTION 11.18. Inspection.........................................91
EXHIBITS
EXHIBIT A - SCHEDULE OF RECEIVABLES
EXHIBIT B - SALE AND SERVICING AGREEMENT
EXHIBIT C - NOTE DEPOSITORY AGREEMENT
EXHIBIT D-1 - FORM OF CLASS A-1 NOTES
EXHIBIT D-2 - FORM OF CLASS A-2 NOTES
EXHIBIT E - FORM OF NOTE POLICY
<PAGE>
INDENTURE dated as of May 31, 1997,
between THE MONEY STORE AUTO TRUST 1997-2, a Delaware
business trust (the "Issuer"), and THE CHASE
MANHATTAN BANK, a New York banking corporation, as
trustee (the "Trustee") and Indenture Collateral
Agent (as defined below)
Each party agrees as follows for the benefit of the other
party and for the Security Insurer and the equal and ratable benefit of the
Holders of the Issuer's Class A-1 6.17% Asset Backed Notes (the "Class A-1
Notes"), and Class A-2 6.495%
Asset Backed Notes (the "Class A-2 Notes", and, together with the Class A-1
Notes, the "Notes"):
As security for the payment and performance by the Issuer of
its obligations under this Indenture and the Notes, the Issuer has agreed to
assign the Indenture Collateral (as defined below) as collateral to the
Indenture Collateral Agent for the benefit of the Trustee on behalf of the
Noteholders and the Security Insurer.
MBIA Insurance Corporation (the "Security Insurer") has issued
and delivered a note guaranty insurance policy, dated the Closing Date (with
endorsements, if any, the "Note Policy"), pursuant to which the Security Insurer
guarantees Note Insured Payments, as defined in the Note Policy.
As an inducement to the Security Insurer to issue and deliver
the Note Policy, the Issuer and the Security Insurer have executed and delivered
the Insurance Agreement, dated as of May 31, 1997 (as amended from time to time,
the "Insurance Agreement"), among the Security Insurer, the Servicer, the
Indenture Trustee, the Owner Trustee, the Issuer, The Money Store Inc., and TMS
Auto Holdings Inc.
As an additional inducement to the Security Insurer to
issue the Note Policy, and as security for the performance by
the Issuer of the Insurer Issuer Secured Obligations and as security for the
performance by the Issuer of the Trustee Issuer Secured Obligations, the Issuer
has agreed to assign the Collateral (as defined below) as collateral to the
Indenture Collateral Agent for the benefit of the Issuer Secured Parties, as
their respective interests may appear.
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Collateral Agent at
the Closing Date, for the benefit of the Issuer Secured
Parties to secure the Issuer Secured Parties, all of the Issuer's right, title
and interest in and to (a) the Initial Receivables, and all moneys due thereon
after the Initial Cutoff Date; (b) the Subsequent Receivables and all moneys due
thereon or in respect thereof after the related Subsequent Cutoff Date; (c) an
assignment of the security interests in the Financed Vehicles granted by
Obligors pursuant to the Initial Receivables and any Subsequent Receivables and
any other interest of the Issuer in the Financed Vehicles; (d) any proceeds with
respect to the Initial Receivables and the Subsequent Receivables repurchased by
a Dealer, pursuant to a Dealer Agreement, as a result of a breach of
representation or warranty in the related Dealer Agreement; (e) all rights under
any Service Contracts on the related Financed Vehicles; (f) any proceeds with
respect to the Initial Receivables and the Subsequent Receivables from claims on
any physical damage, theft, credit life or disability insurance policies
covering Financed Vehicles or Obligors; (g) all funds on deposit from time to
time in the Trust Accounts, and in all investments and proceeds thereof and all
rights of the Issuer therein (including all income thereon); (h) the Issuer's
rights and benefits, but none of its obligations or burdens, under the Purchase
Agreement and each Subsequent Purchase Agreement, including the delivery
requirements, representations and warranties and the cure and repurchase
obligations of TMS Auto Finance under the Purchase Agreement; (i) all items
contained in
the Receivables Files and any and all other documents that TMS Auto Finance
keeps on file in accordance with its customary procedures relating to the
Receivables, the Obligors or the Financed Vehicles, (j) the Issuer's rights and
benefits, but none of its obligations or burdens, under the Sale and Servicing
Agreement (including all rights of the Seller under the Purchase Agreement, any
Subsequent Purchase Agreement and any Subsequent Transfer Agreement assigned to
the Issuer pursuant to the Sale and Servicing Agreement); and (k) all present
and future claims, demands, causes and choses in action in respect of any or all
of the foregoing and all payments on or under and all proceeds of every kind and
nature whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction except as
set forth herein, and to secure compliance with the provisions of this
Indenture, all as provided in this Indenture.
The Indenture Collateral Agent, for the benefit of the
Trustee on behalf of the Holders of the Notes and for the
benefit of the Security Insurer acknowledges such Grant, accepts the trusts
under this Indenture in accordance with the provisions of this Indenture and
agrees to perform its duties required in this Indenture to the best of its
ability to the end that the interests of the Holders of the Notes and the
Security Insurer may be adequately and effectively protected.
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. DEFINITIONS. Except as otherwise specified herein, the
following terms have the respective meanings set forth below for all purposes of
this Indenture.
"ACT" has the meaning specified in Section 11.3(a).
"AFFILIATE" means, with respect to any specified Person, any
other Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. A
Person shall not be deemed to be an Affiliate of any person solely because such
other Person has the contractual right or obligation to manage such Person
unless such other Person controls such Person through equity ownership or
otherwise.
"AUTHORIZED OFFICER" means, with respect to the Issuer
and the Servicer, any officer of the Owner Trustee or the
Servicer, as applicable, who is authorized to act for the Owner Trustee or the
Servicer, as applicable, in matters relating to the Issuer or the Servicer and
who is identified on the list of
Authorized Officers delivered by each of the Owner Trustee and the Servicer to
the Trustee on the Closing Date (as such list may be modified or supplemented
from time to time thereafter).
"BASIC DOCUMENTS" means the Certificate of Trust, the
Trust Agreement, the Sale and Servicing Agreement, the
Indenture, the Depository Agreements, the Purchase Agreement,
the Insurance Agreement and other documents and certificates
delivered in connection therewith.
"BOOK ENTRY NOTES" means a beneficial interest in the Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.10.
"BUSINESS DAY" means (i) with respect to the Note Policy, any
day other than a Saturday, Sunday, legal holiday or other day on which the
Insurer or commercial banking institutions in Wilmington, Delaware or the City
of New York or any other location of any successor Servicer, successor Owner
Trustee or successor Indenture Collateral Agent are authorized or obligated by
law, executive order or governmental decree to be closed and (ii) otherwise, a
day other than a Saturday, a Sunday or other day on which commercial banks
located in the states of California, Delaware, New Jersey or New York are
authorized or obligated to be closed.
"CERTIFICATE OF TRUST" means the certificate of trust of the
Issuer substantially in the form of Exhibit B to the Trust Agreement.
"CLASS A-1 NOTES" means the Class A-1 6.17% Asset Backed
Notes, substantially in the form of Exhibit D-1.
"CLASS A-1 INTEREST RATE" means, 6.17% per annum (computed on
the basis of a 360-day year of twelve 30-day months).
"CLASS A-2 NOTES" means the Class A-2 6.495% Asset Backed
Notes, substantially in the form of Exhibit D-2.
"CLASS A-2 INTEREST RATE" means 6.495% per annum (computed on
the basis of a 360-day year of twelve 30-day months).
"CLEARING AGENCY" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"CLOSING DATE" means June 26, 1997.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time, and Treasury Regulations promulgated thereunder.
"COLLATERAL" has the meaning specified in the Granting
Clause of this Indenture.
"CONTROLLING PARTY" means the Security Insurer, so long as no
Insurer Default shall have occurred and be continuing, and the Trustee, for so
long as an Insurer Default shall have occurred and be continuing.
"CORPORATE TRUST OFFICE" means the principal office of the
Trustee at which at any particular time its corporate trust business shall be
administered which office at date of the
execution of this Agreement is located at 450 West 33rd Street,
10th Floor, New York, New York 10001-2697, Attention: Corporate
Trust Department or at such other address as the Trustee may
designate from time to time by notice to the Noteholders, the Security Insurer,
the Servicer and the Issuer, or the principal corporate trust office of any
successor Trustee (the address of which the successor Trustee will notify the
Noteholders and the Issuer).
"DEFAULT" means any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
"DEFINITIVE NOTES" has the meaning specified in
Section 2.10.
"EVENT OF DEFAULT" has the meaning specified in
Section 5.1.
"EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
"EXECUTIVE OFFICER" means, with respect to any
corporation, the Chief Executive Officer, Chief Operating
Officer, Chief Financial Officer, President, Executive Vice
President, any Vice President, the Secretary or the Treasurer of
such corporation; and with respect to any partnership, any
general partner thereof.
"GENERAL PARTNER" means each Certificateholder obligated to
pay the expenses of the Issuer pursuant to Section 2.7 of the Trust Agreement.
"GRANT" means mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, grant a lien upon
or a security interest in or right of set-off against, deposit, or set over and
confirm pursuant to this Indenture. A Grant of the Collateral or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the Granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Collateral and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring proceedings in the name of the Granting party or otherwise and generally
to do and receive anything that the Granting party is or may be entitled to do
or receive thereunder or with respect thereto.
"HOLDER" or "NOTEHOLDER" means the Person in whose name a Note
is registered on the Note Register.
"INDEBTEDNESS" means, with respect to any Person at any time,
(a) indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (c) current liabilities of such Person in respect of unfunded
vested benefits under plans covered by Title IV of ERISA; (d) obligations issued
for or liabilities incurred on the account of such Person; (e) obligations or
liabilities of such Person arising under acceptance facilities; (f) obligations
of such Person under any guarantees, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person
or otherwise to assure a creditor against loss; (g) obligations of such Person
secured by any lien on property or assets of such Person, whether or not the
obligations have been assumed by such Person; or (h) obligations of such Person
under any interest rate or currency exchange agreement.
"INDENTURE" means this Indenture as amended and
supplemented from time to time.
"INDENTURE COLLATERAL AGENT" means, initially, The Chase
Manhattan Bank, in its capacity as collateral agent on behalf of the Issuer
Secured Parties, including its successors in interest, until and unless a
successor Person shall have become the Indenture Collateral Agent pursuant to
Section 6.17 hereof, and thereafter "Indenture Collateral Agent" shall mean such
successor Person.
"INDEPENDENT" means, when used with respect to any specified
Person, that the person (a) is in fact independent of the Issuer, any other
obligor upon the Notes, the Seller and any
Affiliate of any of the foregoing persons, (b) does not have any direct
financial interest or any material indirect financial interest in the Issuer,
any such other obligor, the Seller or any Affiliate of any of the foregoing
Persons and (c) is not connected with the Issuer, any such other obligor, the
Seller or any Affiliate of any of the foregoing Persons as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions.
"INDEPENDENT CERTIFICATE" means a certificate or opinion to be
delivered to the Indenture Collateral Agent under the circumstances described
in, and otherwise complying with, the applicable requirements of Section 11.1,
prepared by an Independent appraiser or other expert appointed by an Issuer
Order and approved by the Indenture Collateral Agent in the exercise of
reasonable care, and such opinion or certificate shall state that the signer has
read the definition of "Independent" in this Indenture and that the signer is
Independent within the meaning thereof.
"INSURANCE AGREEMENT EVENT OF DEFAULT" has the meaning
specified therefor in the Insurance Agreement.
"INSURER ISSUER SECURED OBLIGATIONS" means all amounts
and obligations which the Issuer may at any time owe to or on
behalf of the Security Insurer under this Indenture, the Insurance Agreement or
any other Basic Document.
"INTEREST RATE" means, with respect to the (i) Class A- 1
Notes, the Class A-1 Interest Rate and (ii) Class A-2 Notes, the Class A-2
Interest Rate.
"ISSUER" means the party named as such in this Indenture until
a successor replaces it and, thereafter, means the successor and, for purposes
of any provision contained herein and required by the TIA, each other obligor on
the Notes.
"ISSUER ORDER" and "ISSUER REQUEST" means a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Trustee.
"ISSUER SECURED OBLIGATIONS" means the Insurer Issuer
Secured Obligations and the Trustee Issuer Secured Obligations.
"ISSUER SECURED PARTIES" means each of the Trustee in respect
of the Trustee Issuer Secured Obligations and the Security Insurer in respect of
the Insurer Issuer Secured Obligations.
"NOTE" means a Class A-1 Note and a Class A-2 Note.
"NOTE DEPOSITORY AGREEMENT" means the agreement among the
Issuer, the Trustee, the Servicer and The Depository Trust Company, as the
initial Clearing Agency, dated June, 1997, substantially in the form of Exhibit
C.
"NOTE INSURED PAYMENTS" has the meaning specified in
the Note Policy.
"NOTE POLICY" means the note guaranty insurance policy
issued by the Security Insurer with respect to the Notes,
including any endorsements thereto, if any, in the form of
Exhibit E.
"NOTE OWNER" means, with respect to a Book-Entry Note,
the person who is the owner of such Book-Entry Note, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"NOTE REGISTER" and "NOTE REGISTRAR" have the respective
meanings specified in Section 2.4.
"NOTICE" has the meaning specified in Section 5.18.
"OFFICER'S CERTIFICATE" means a certificate signed by any
Authorized Officer of the Owner Trustee, under the circumstances described in,
and otherwise complying with, the applicable requirements of Section 11.1 and
TIA ss. 314, and delivered to the Trustee. Unless otherwise specified, any
reference in this Indenture to an Officer's Certificate shall be
to an Officer's Certificate of any Authorized Officer of the
Issuer.
"OPINION OF COUNSEL" means one or more written opinions of
counsel who may, except as otherwise expressly provided in this Indenture, be
employees of or counsel to the Issuer and who shall be satisfactory to the
Trustee and addressed to the Security Insurer and satisfactory to the Security
Insurer, and which shall comply with any applicable requirements of Section
11.01, and shall be in form and substance satisfactory to the Trustee, and shall
be addressed to the Security Insurer and satisfactory to the Security Insurer.
"OUTSTANDING" means, as of the date of determination, all
Notes theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore canceled by the Note Registrar
or delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money
in the necessary amount has been theretofore deposited with the Trustee
or any Paying Agent in trust for the Holders of such Notes (provided,
however, that if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor, satisfactory to the Trustee); and
(iii) Notes in exchange for or in lieu of other Notes which
have been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Trustee is
presented that any such Notes are held by a bona fide
purchaser;
PROVIDED, HOWEVER, that Notes which have been paid with proceeds of the Note
Policy shall continue to remain Outstanding for
purposes of this Indenture until the Security Insurer has been paid as subrogee
hereunder or reimbursed pursuant to the Insurance Agreement as evidenced by a
written notice from the Security Insurer delivered to the Trustee, and the
Security Insurer shall be deemed to be the Holder thereof to the extent of any
payments thereon made by the Security Insurer; PROVIDED,
FURTHER, that in determining whether the Holders of the requisite Outstanding
Amount of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Basic Document, Notes owned by
the Issuer, any other obligor upon the Notes, the Seller or any Affiliate of any
of the foregoing Persons shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Notes that a Responsible Officer of the Trustee either actually
knows to be so owned or has received written notice thereof shall be so
disregarded. Notes so owned that have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Notes and that the pledgee is not
the Issuer, any other obligor upon the Notes, the Seller or any Affiliate of any
of the foregoing Persons.
"OUTSTANDING AMOUNT" means the aggregate principal amount of
all Notes, or class of Notes, as applicable, Outstanding at the date of
determination.
"PAYING AGENT" means the Trustee or any other Person
acceptable to the Security Insurer that meets the eligibility standards for the
Trustee specified in Section 6.11 and is authorized by the Issuer to make the
payments to and distributions from the Collection Account and the Note
Distribution Account, including payment of principal of or interest on the Notes
on behalf of the Issuer.
"PAYMENT DATE" means a Distribution Date.
"PREDECESSOR NOTE" means, with respect to any
particular Note, every previous Note evidencing all or a portion
of the same debt as that evidenced by such particular Note; and, for the
purpose of this definition, any Note authenticated and delivered under Section
2.5 in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Note.
"PREFERENCE CLAIM" has the meaning specified in
Section 5.19.
"PREPAYMENT AMOUNT" means, as of the Payment Date on or
immediately following the last day of the Funding Period, after giving effect to
any transfer of Subsequent Receivables on such date, an amount equal to the
Pre-Funded Amount as of such Payment Date.
"PROCEEDING" means any suit in equity, action at law
or other judicial or administrative proceeding.
"RATING AGENCY" means each of Moody's and Standard & Poor's,
so long as such Persons maintain a rating on the Notes; and if either Moody's or
Standard & Poor's no longer maintains a
rating on the Notes, such other nationally recognized statistical rating
organization selected by the Seller and (so long as an Insurer Default shall not
have occurred and be continuing) acceptable to the Security Insurer.
"RATING AGENCY CONDITION" means, with respect to any action,
that each Rating Agency shall have been given 10 days' (or such shorter period
as shall be acceptable to each Rating Agency) prior notice thereof and that each
of the Rating Agencies shall have notified the Seller, the Servicer, the
Security Insurer, the Trustee, the Owner Trustee and the Issuer in writing that
such action will not result in a reduction or withdrawal of the then current
rating of the Notes.
"RECORD DATE" means, with respect to a Payment Date or
Redemption Date, the close of business on the last Business Day immediately
preceding such Payment Date or Redemption Date.
"REDEMPTION DATE" means (a) in the case of a redemption of the
Notes pursuant to Section 10.1(a) or a payment to Noteholders pursuant to
Section 10.1(b), the Payment Date specified by the Servicer or the Issuer
pursuant to Section 10.1(a) or (b) as applicable.
"REDEMPTION PRICE" means (a) in the case of a redemption of
the Notes pursuant to Section 10.1(a), an amount equal to the unpaid principal
amount of the then outstanding principal amount of each class of Notes being
redeemed plus accrued and unpaid interest thereon to but excluding the
Redemption Date and any amounts then owing to Security Insurer or (b) in the
case of a payment made to Noteholders pursuant to Section 10.1(b), the amount on
deposit in the Note Distribution Account, but not in excess of the amount
specified in clause (a)
above.
"RESPONSIBLE OFFICER" means, with respect to the Trustee, any
officer within the Corporate Trust Office of the Trustee, including any Vice
President, Assistant Vice President,
Assistant Treasurer, Assistant Secretary, or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing
Agreement dated as of May 31, 1997, among the Issuer, the Representative, the
Seller and the Servicer, substantially in the form of Exhibit B as the same may
be amended or supplemented from time to time.
"SCHEDULE OF RECEIVABLES" means the listing of the Receivables
set forth in Exhibit A (which Exhibit may be in the form of microfiche); as
supplemented on each Subsequent Transfer
Date to reflect the sale to the Issuer of Subsequent Receivables.
"STATE" means any one of the 50 states of the United
States of America or the District of Columbia.
"SUCCESSOR SERVICER" has the meaning specified in
Section 3.7(e).
"TERMINATION DATE" means the latest of (i) the expiration of
the Note Policy and the return of the Note Policy to the Security Insurer for
cancellation, (ii) the date on which
the Security Insurer shall have received payment and performance of all Insurer
Issuer Secured Obligations and (iii) the date on which the Trustee shall have
received payment and performance of all Trustee Issuer Secured Obligations.
"TRUST ESTATE" means all money, instruments, rights and other
property that are subject or intended to be subject to the lien and security
interest of this Indenture for the benefit of the Noteholders and the Security
Insurer (including all property and interests Granted to the Indenture
Collateral Agent), including all proceeds thereof.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act
of 1939 as in force on the date hereof, unless otherwise specifically provided.
"TRUSTEE" means The Chase Manhattan Bank, a New York banking
corporation, not in its individual capacity but as trustee under this Indenture,
or any successor trustee under this Indenture.
"TRUSTEE ISSUER SECURED OBLIGATIONS" means all amounts
and obligations which the Issuer may at any time owe to or on
behalf of the Trustee for the benefit of the Noteholders and the Security
Insurer under this Indenture or the Notes.
"UCC" means, unless the context otherwise requires, the
Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended
from time to time.
(a) Except as otherwise specified herein, the following terms
have the respective meanings set forth in the Sale and Servicing Agreement as in
effect on the Closing Date for all purposes of this Indenture, and the
definitions of such terms are equally applicable both to the singular and plural
forms of such terms:
Section of Sale
TERM and
SERVICING
AGREEMENT
Accelerated Principal Distributable Amount........ Section 1.1
Annual Percentage Rate or APR..................... Section 1.1
Capitalized Interest Account...................... Section 1.1
Certificateholders................................ Section 1.1
Certificate Policy................................ Section 1.1
Closing Date...................................... Section 1.1
Collection Account................................ Section 1.1
Collection Period................................. Section 1.1
Contract.......................................... Section 1.1
Depositor......................................... Section 1.1
Depository Agreements............................. Section 1.1
Distribution Date................................. Section 1.1
Eligible Deposit Account.......................... Section 1.1
Eligible Investments.............................. Section 1.1
Final Scheduled Distribution Date................. Section 1.1
Final Scheduled Maturity Date..................... Section 1.1
Financed Vehicle.................................. Section 1.1
Funding Period.................................... Section 1.1
Initial Receivables............................... Section 1.1
Interest Period................................... Section 1.1
Note Distribution Account......................... Section 1.1
Insurance Agreement............................... Section 1.1
Insurance Agreement Event of Default.............. Section 1.1
Insurer Default................................... Section 1.1
Interest Period................................... Section 1.1
Monthly Period.................................... Section 1.1
Note Distribution Account......................... Section 1.1
Noteholders' Distributable Amount................. Section 1.1
Noteholders' Interest Distributable Amount........ Section 1.1
Noteholders' Percentage........................... Section 1.1
Noteholders' Principal Distributable Amount....... Section 1.1
Obligor........................................... Section 1.1
Original Pool Balance............................. Section 1.1
Owner Trustee..................................... Section 1.1
Parity Date....................................... Section 1.1
Person............................................ Section 1.1
Pool Balance...................................... Section 1.1
Precomputed Receivable............................ Section 1.1
Pre-Funded Amount................................. Section 1.1
Pre-Funding Account............................... Section 1.1
Purchase Agreement................................ Section 1.1
Purchased Receivable.............................. Section 1.1
Rating Agency..................................... Section 1.1
Rating Agency Condition........................... Section 1.1
Receivable........................................ Section 1.1
Security Insurer.................................. Section 1.1
Seller............................................ Section 1.1
Servicer.......................................... Section 1.1
Servicer Default.................................. Section 1.1
Simple Interest Receivable........................ Section 1.1
Subsequent Purchase Agreement..................... Section 1.1
Subsequent Receivables............................ Section 1.1
Subsequent Transfer Date.......................... Section 1.1
Total Distribution Amount......................... Section 1.1
Trust Accounts.................................... Section 1.1
Trust Agreement................................... Section 1.1
(b) Capitalized terms used herein and not otherwise
defined herein or in the Sale and Servicing Agreement have the
meanings assigned to them in the Trust Agreement.
SECTION 1.2. INCORPORATION BY REFERENCE OF TRUST
INDENTURE ACT. Whenever this Indenture refers to a provision of
the TIA, the provision is incorporated by reference in and made
a part of this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"Commission" means the Securities and Exchange
Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means
the Trustee.
"obligor" on the indenture securities means the Issuer
and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule have the meaning assigned to them by such definitions.
SECTION 1.3. RULES OF CONSTRUCTION. Unless the context
otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
and
(v) words in the singular include the plural and
words in the plural include the singular.
ARTICLE II.
THE NOTES
SECTION 2.1. FORM. The Class A-1 Notes and the Class A-2 Notes, in
each case together with the Trustee's certificate of authentication, shall be in
substantially the form set forth in Exhibit D-1 and D-2 respectively, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may, consistently herewith, be determined by the officers executing such Notes,
as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.
The Definitive Notes shall be typewritten, printed,
lithographed or engraved or produced by any combination of these
methods (with or without steel engraved borders), all as
determined by the officers executing such Notes, as evidenced by
their execution of such Notes.
Each Note shall be dated the date of its authentication. The
terms of the Notes set forth in Exhibit D is part of the terms of this
Indenture.
SECTION 2.2. EXECUTION, AUTHENTICATION AND DELIVERY. The Notes
shall be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals
who were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Trustee shall upon receipt of the Note Policy and Issuer
Order authenticate and deliver Class A-1 Notes for original issue in an
aggregate principal amount of $160,000,000 and Class A-2 Notes for original
issue in the aggregate principal amount of $60,500,000. Class A-1 Notes and
Class A-2 Notes outstanding at any time may not exceed such amounts except as
provided in Section 2.5.
Each Note shall be dated the date of its
authentication. The Notes shall be issuable as registered Notes
in the minimum denomination of $1,000 and in integral multiples
thereof (except for one Note of each class which may be issued
in a denomination other than an integral multiple of $1,000).
No Note shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and delivered
hereunder.
SECTION 2.3. TEMPORARY NOTES. Pending the preparation
of Definitive Notes, the Issuer may execute, and upon receipt of
an Issuer Order the Trustee shall authenticate and deliver, temporary Notes
which are printed, lithographed, typewritten, mimeographed or otherwise
produced, of the tenor of the Definitive Notes in lieu of which they are issued
and with such variations not inconsistent with the terms of this Indenture as
the officers executing such Notes may determine, as evidenced by their
execution of such Notes.
If temporary Notes are issued, the Issuer will cause
Definitive Notes to be prepared without unreasonable delay. After the
preparation of Definitive Notes, the temporary Notes shall be exchangeable for
Definitive Notes upon surrender of the temporary Notes at the office or agency
of the Issuer to be maintained as provided in Section 3.2, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes, the
Issuer shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Definitive Notes.
SECTION 2.4. REGISTRATION; REGISTRATION OF TRANSFER AND
EXCHANGE. The Issuer shall cause to be kept a register (the
"Note Register") in which, subject to such reasonable
regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of
Notes. The Trustee shall be "Note Registrar" for the purpose
of registering Notes and transfers of Notes as herein
provided. Upon any resignation of any Note Registrar, the
Issuer shall promptly appoint a successor or, if it elects not
to make such an appointment, assume the duties of Note
Registrar.
If a Person other than the Trustee is appointed by the Issuer
as Note Registrar, the Issuer will give the Trustee
prompt written notice of the appointment of such Note Registrar and of the
location, and any change in the location, of the Note Register, and the Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Trustee shall have the right to rely upon a
certificate executed on behalf of the Note Registrar by an Executive Officer
thereof as to the names and addresses of the Holders of the Notes and the
principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the
office or agency of the Issuer to be maintained as provided in Section 3.2, if
the requirements of Section 8-401(1)
of the UCC are met the Issuer shall execute and upon its request the Trustee
shall authenticate and the Noteholder shall obtain from the Trustee, in the name
of the designated transferee or transferees, one or more new Notes, in any
authorized denominations, of the same class and a like aggregate principal
amount.
At the option of the Holder, Notes may be exchanged for other
Notes in any authorized denominations, of the same class and a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange, if the requirements
of Section 8-401(1) of the UCC are met the Issuer shall execute and upon its
request the Trustee shall authenticate and the Noteholder shall obtain from the
Trustee, the Notes which the Noteholder making the exchange is entitled to
receive.
All Notes issued upon any registration of transfer or exchange
of Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of
transfer or exchange shall be (i) duly endorsed by, or be accompanied by a
written instrument of transfer in form satisfactory to the Trustee duly executed
by, the Holder thereof
or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar which requirements include
membership or participation in Securities Transfer Agents Medallion Program
("Stamp") or such other "signature guarantee program" as may be determined by
the Note Registrar in addition to, or in substitution for, Stamp, all in
accordance with the Exchange Act, and (ii) accompanied by such other documents
as the Trustee may require.
No service charge shall be made to a Holder for any
registration of transfer or exchange of Notes, but the Note Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 2.3 or 9.6 not
involving any transfer.
The preceding provisions of this section notwithstanding, the
Issuer shall not be required to make and the Note Registrar need not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to the
Note.
SECTION 2.5. MUTILATED, DESTROYED, LOST OR STOLEN
Notes. If (i) any mutilated Note is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, and (ii) there is
delivered to the Trustee and the Security Insurer (unless an
Insurer Default shall have occurred and be continuing) such
security or indemnity as may be required by it to hold the
Issuer, the Trustee and the Security Insurer harmless, then, in
the absence of notice to the Issuer, the Note Registrar or the
Trustee that such Note has been acquired by a bona fide
purchaser, and provided that the requirements of Section 8-405
of the UCC are met, the Issuer shall execute and upon its
request the Trustee shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen
Note, a replacement Note; PROVIDED, HOWEVER, that if any such
destroyed, lost or stolen Note, but not a mutilated Note, shall
have become or within seven days shall be due and payable, or
shall have been called for redemption, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or
stolen Note when so due or payable or upon the Redemption Date
without surrender thereof. If, after the delivery of such
replacement Note or payment of a destroyed, lost or stolen Note
pursuant to the proviso to the preceding sentence, a bona fide
purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original
Note, the Issuer, the Trustee and the Security Insurer shall be
entitled to recover such replacement Note (or such payment)
from the Person to whom it was delivered or any Person taking
such replacement Note from such Person to whom such replacement
Note was delivered or any assignee of such Person, except a
bona fide purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the
Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section,
the Issuer may require the payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute
an original additional contractual obligation
of the Issuer, whether or not the mutilated, destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Notes.
SECTION 2.7. PERSONS DEEMED OWNER. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Trustee, any agent of the
Issuer or the Trustee, the Security Insurer may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any
on such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and none of the Issuer, the Security Insurer, the Trustee nor any agent
of the Issuer or the Trustee shall be affected by notice to the contrary.
SECTION 2.8. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST.
(a) The Notes shall accrue interest as provided in the forms of the Class A-1
Note and the Class A-2 Note set forth in Exhibits D-1 and D-2, respectively, and
such interest shall be payable on each Payment Date as specified therein. Any
installment of interest or principal, if any, payable on any Note which is
punctually paid or duly provided for by the Issuer on the applicable Payment
Date shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the Record Date, by check mailed
first-class, postage prepaid, to such Person's address as it appears on the Note
Register on such Record Date, except that, unless Definitive Notes have been
issued pursuant to Section 2.12, with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such nominee
to be Cede & Co.), payment will be made by wire transfer in immediately
available funds to the account designated by such nominee and except for the
final installment of principal payable with respect to such Note on a Payment
Date or on the Final Scheduled Distribution Date (and except for the Redemption
Price for any Note called for redemption pursuant to Section 10.1(a)) which
shall be payable as provided below. The funds represented by any such checks
returned undelivered shall be held in accordance with Section 3.3.
(b) The principal of each Note shall be payable in
installments on each Payment Date as provided in the forms of the Class A-1 Note
and the Class A-2 Note set forth in Exhibits D-1 and D-2, respectively.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable, if not previously paid, on the date on which an Event
of Default shall have occurred and be continuing, if the Trustee or the Holders
of the Notes representing not less than a majority of the Outstanding Amount of
the Notes have declared the Notes to be immediately due and payable in the
manner provided in Section 5.2. All principal payments on each class of Notes
shall be made pro rata to the Noteholders of such class entitled thereto. The
Trustee shall notify the Person in whose name a Note is registered at the close
of business on the Record Date preceding the Payment Date on which the Issuer
expects that the final installment of principal of and interest on such Note
will be paid. Such notice shall be mailed or transmitted by facsimile prior to
such final Payment Date and shall specify that such final installment will be
payable only upon presentation and surrender of such Note and shall specify the
place where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on the
Notes, the Issuer shall pay defaulted interest (plus interest on such defaulted
interest to the extent lawful) at the appli- cable Interest Rate in any lawful
manner. The Issuer may pay such defaulted interest to the Persons who are
Noteholders on a subsequent special record date, which date shall be at least
five Business Days prior to the payment date. The Issuer shall fix or cause to
be fixed any such special record date and payment date, and, at least 15 days
before any such special record date, the Issuer shall mail to each Noteholder
and the Trustee a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
(d) Promptly following the date on which all principal of and
interest on the Notes has been paid in full and the Notes have been surrendered
to the Trustee, the Trustee shall, if the Security Insurer has paid any amount
in respect of the Notes under the Note Policy or otherwise which has not been
reimbursed to it, deliver such surrendered Notes to the Security Insurer.
SECTION 2.8. CANCELLATION. Subject to Section 2.7(d), all Notes
surrendered for payment, registration of transfer, exchange or redemption shall,
if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly canceled by
the Trustee. Subject to Section 2.7(d), the Issuer may at any time deliver to
the Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Issuer may have acquired in any manner whatsoever, and all
Notes so delivered shall be promptly canceled by the Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled as provided in
this Section, except as expressly permitted by this Indenture. Subject to
Section 2.7(d), all canceled Notes may be held or disposed of by the Trustee in
accordance with its standard retention or disposal policy as in effect at the
time unless the Issuer shall direct by an Issuer Order that they be destroyed or
returned to it; PROVIDED that such Issuer Order is timely and the Notes have not
been previously disposed of by the Trustee.
SECTION 2.9 RELEASE OF COLLATERAL. The Indenture Collateral Agent
shall, on or after the Termination Date, release any remaining portion of the
Trust Estate from the lien created by this Indenture and deposit in the
Collection Account any funds then on deposit in any other Trust Account. The
Indenture Collateral Agent shall release property from the lien created by this
Indenture pursuant to this Section 2.9 only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and (if required
by the TIA) Independent Certificates in accordance with TIA Sections 314(c) and
314(d)(1) meeting the applicable requirements of Section 11.1.
SECTION 2.10. BOOK-ENTRY NOTES. The Notes, upon original issuance,
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on
behalf of, the Issuer. Such Notes shall initially be registered on the Note
Register in the name of Cede & Co., the nominee of the initial Clearing Agency,
and no Note Owner will receive a Definitive Note representing such Note Owner's
interest in such Note, except as provided in Section 2.12. Unless and until
definitive, fully registered Notes (the "Definitive Notes") have been issued to
Note Owners pursuant to Section 2.12:
(i) the provisions of this Section shall be in
full force and effect;
(ii) the Note Registrar and the Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the
Notes and the giving of instructions or directions hereunder) as the
sole Holder of the Notes, and shall have no obligation to the Note
Owners;
(iii) to the extent that the provisions of this
Section conflict with any other provisions of this Indenture, the
provisions of this Section shall control;
(iv) the rights of Note Owners shall be exercised
only through the Clearing Agency and shall be limited to
those established by law and agreements between such Note Owners and
the Clearing Agency and/or the Clearing Agency Participants. Pursuant
to the Note Depository Agreement, unless and until Definitive Notes are
issued pursuant to Section 2.12, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants
and receive and transmit payments of principal of and
interest on the Notes to such Clearing Agency Participants;
(v) whenever this Indenture requires or permits
actions to be taken based upon instructions or directions of Holders of
Notes evidencing a specified percentage of the Outstanding Amount of
the Notes, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to such
effect from Note Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the beneficial
interest in the Notes and has delivered such instructions to the
Trustee; and
(vi) Note Owners may receive copies of any reports
sent to Noteholders pursuant to this Indenture, upon written request,
together with a certification that they are Note Owners and payment of
reproduction and postage expenses associated with the distribution of
such reports, from the Trustee at the Corporate Trust Office.
SECTION 2.11. NOTICES TO CLEARING AGENCY. Whenever a
notice or other communication to the Noteholders is required
under this Indenture, unless and until Definitive Notes shall have been issued
to Note Owners pursuant to Section 2.12, the Trustee shall give all such notices
and communications specified
herein to be given to Holders of the Notes to the Clearing Agency, and shall
have no obligation to the Note Owners.
SECTION 2.12. DEFINITIVE NOTES. If (i) the Servicer advises the
Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities with respect to the Notes, and the
Servicer is unable to locate a qualified successor, (ii) the Servicer at its
option advises the Trustee in writing that it elects to terminate the book-entry
system through the Clearing Agency or (iii) after the occurrence of an Event of
Default, Note Owners representing beneficial interests aggregating at least a
majority of the Outstanding Amount of the Notes advise the Trustee through the
Clearing Agency in writing that the continuation of a book entry system through
the Clearing Agency is no longer in the best interests of the Note Owners, then
the Clearing Agency shall notify all Note Owners and the Trustee of the
occurrence of any such event and of the availability of Definitive Notes to Note
Owners requesting the same. Upon surrender to the Trustee of the typewritten
Note or Notes representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute and the
Trustee shall authenticate the Definitive Notes in accordance with the
instructions of the Clearing Agency. None of the Issuer, the Note Registrar or
the Trustee shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Notes, the
Trustee shall recognize the Holders of the Definitive Notes as
Note- holders.
ARTICLE III
COVENANTS
SECTION 3.1. PAYMENT OF PRINCIPAL AND INTEREST. The Issuer will
duly and punctually pay the principal of and interest on the Notes in accordance
with the terms of the Notes and this Indenture. Without limiting the foregoing,
the Issuer will cause to be distributed all amounts on deposit in the Note
Distribution Account on a Payment Date deposited therein pursuant to the Sale
and Servicing Agreement (i) for the benefit of the Class A-l Notes, to Class A-1
Noteholders and (ii) for the benefit of the Class A-2 Notes, to Class A-2
Noteholders. Amounts properly withheld under the Code by any Person from a
payment to any Noteholder of interest and/or principal shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.
SECTION 3.2. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Notes may be surrendered for registration of transfer or exchange, and
where notices and
demands to or upon the Issuer in respect of the Notes and this Indenture may be
served. The Issuer hereby initially appoints the Trustee to serve as its agent
for the foregoing purposes. The Issuer will give prompt written notice to the
Trustee of the
location, and of any change in the location, of any such office
or agency. If at any time the Issuer shall fail to maintain
any such office or agency or shall fail to furnish the Trustee with the address
thereof, such surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Issuer hereby appoints the Trustee as its agent
to receive all such surrenders, notices and demands.
SECTION 3.3. MONEY FOR PAYMENTS TO BE HELD IN TRUST. As
provided in Sections 8.2(a) and (b), all payments of amounts
due and payable with respect to any Notes that are to be made
from amounts withdrawn from the Collection Account and the Note
Distribution Account shall be made on behalf of the Issuer by
the Trustee or by another Paying Agent, and no amounts so
withdrawn from the Collection Account and the Note Distribution
Account for payments of Notes shall be paid over to the Issuer
except as provided in this Section.
On or before each Payment Date and Redemption Date, the Issuer
shall deposit or cause to be deposited in the Note Distribution Account an
aggregate sum sufficient to pay the amounts then becoming due under the Notes,
such sum to be held in trust for the benefit of the Persons entitled thereto and
(unless the Paying Agent is the Trustee) shall promptly notify the Trustee of
its action or failure so to act.
The Issuer will cause each Paying Agent other than the Trustee
to execute and deliver to the Trustee and the Security
Insurer an instrument in which such Paying Agent shall agree with the Trustee
(and if the Trustee acts as Paying Agent, it hereby so agrees), subject to the
provisions of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Trustee notice of any default by the Issuer of
which it has actual knowledge (or any other obligor upon the Notes) in
the making of any payment required to be made with respect to the
Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such
Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay
to the Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a
Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Trustee all sums held in trust by
such Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which the sums were held by such Paying Agent; and upon such a
payment by any Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.
Subject to applicable laws with respect to the escheat of
funds, any money held by the Trustee or any Paying Agent in
trust for the payment of any amount due with respect to any Note
and remaining unclaimed for two years after such amount has
become due and payable shall be discharged from such trust and
be paid to the Issuer on Issuer Request with the consent of the
Security Insurer (unless an Insurer Default shall have occurred and be
continuing), and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Trustee or such Paying Agent with respect to such trust
money shall thereupon cease; PROVIDED, HOWEVER, that if such money or any
portion thereof had been previously deposited by the Security Insurer or the
Indenture Collateral Agent with the Trustee for the payment of principal or
interest on the Notes, to the extent any amounts are owing to the Security
Insurer, such amounts shall be paid promptly to the Security Insurer upon
receipt of a written request by the Security Insurer to such effect, and
PROVIDED, FURTHER, that the Trustee or such Paying Agent, before being required
to make any such repayment, shall at the expense of the Issuer cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the Issuer.
The Trustee shall also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Holders whose Notes have been called but
have not been surrendered for redemption or whose right to or interest in moneys
due and payable but not claimed is determinable from the records of the Trustee
or of any Paying Agent, at the last address of record for each such Holder).
SECTION 3.4. EXISTENCE. Except as otherwise permitted by the
provisions of Section 3.10, the Issuer will keep in full effect its existence,
rights and franchises as a business trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.5. PROTECTION OF TRUST ESTATE. The Issuer
intends the security interest Granted pursuant to this Indenture
in favor of the Issuer Secured Parties to be prior to all other liens in
respect of the Trust Estate, and the Issuer shall take all actions necessary to
obtain and maintain, in favor of the
Indenture Collateral Agent, for the benefit of the Issuer Secured Parties, a
first lien on and a first priority, perfected security interest in the Trust
Estate. The Issuer will from time to time prepare (or shall cause to be
prepared), execute and deliver all such supplements and amendments hereto and
all such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action necessary or
advisable to:
(i) Grant more effectively all or any portion of the
Trust Estate;
(ii) maintain or preserve the lien and security interest (and
the priority thereof) in favor of the Indenture Collateral Agent for
the benefit of the Issuer Secured Parties created by this Indenture or
carry out more
effectively the purposes hereof;
(iii) perfect, publish notice of or protect the
validity of any Grant made or to be made by this Indenture;
(iv) enforce any of the Collateral;
(v) preserve and defend title to the Trust Estate and the
rights of the Indenture Collateral Agent in such Trust Estate against
the claims of all persons and parties; and
(vi) pay all taxes or assessments levied or assessed upon the
Trust Estate when due.
The Issuer hereby designates the Indenture Collateral Agent its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required by the Indenture Collateral Agent pursuant to this
Section.
SECTION 3.6. OPINIONS AS TO TRUST ESTATE. (a) On the Closing Date,
the Issuer shall furnish to the Trustee, the Indenture Collateral Agent and the
Security Insurer an Opinion of Counsel either stating that, in the opinion of
such counsel, such action has been taken with respect to the recording and
filing of this Indenture, any indentures supplemental hereto, and any other
requisite documents, and with respect to the execution and filing of any
financing statements and continuation statements, as are necessary to perfect
and make effective the first priority lien and security interest in favor of the
Indenture Collateral Agent, for the benefit of the Issuer Secured Parties,
created by this Indenture and reciting the details of such action, or stating
that, in the opinion of such counsel, no such action is necessary to make such
lien and security interest effective.
(b) Within 120 days after the beginning of each calendar year,
beginning with the first calendar year beginning more than three months after
the Closing Date, the Issuer shall furnish to the Trustee, Indenture Collateral
Agent and the Security Insurer an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken with respect to the
recording, filing, re-recording and refiling of this Indenture, any indentures
supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as are necessary to maintain
the lien and security interest created by this Indenture and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture until January 30 in
the following calendar year.
SECTION 3.7. PERFORMANCE OF OBLIGATIONS; SERVICING OF
RECEIVABLES. (a) The Issuer will not take any action and will
use its best efforts not to permit any action to be taken by others that would
release any Person from any of such Person's material covenants or obligations
under any instrument or agreement included in the Trust Estate or that would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any such instrument or
agreement, except as ordered by any bankruptcy or other court or as expressly
provided in this Indenture, the Basic Documents or such other instrument or
agreement.
(b) The Issuer may contract with other Persons acceptable to
the Security Insurer (so long as no Insurer Default shall have occurred and be
continuing) to assist it in performing its duties under this Indenture, and any
performance of such duties by a Person identified to the Trustee and the
Security Insurer in an Officer's Certificate of the Issuer shall be deemed to be
action taken by the Issuer. Initially, the Issuer has contracted with the
Servicer to assist the Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Trust Estate, including but
not limited to preparing (or causing to be prepared) and filing (or causing to
be filed) all UCC financing statements and continuation statements required to
be filed by the terms of this Indenture and the Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
Except as otherwise expressly provided therein, the Issuer shall not waive,
amend, modify, supplement or terminate any Basic Document or any provision
thereof without the consent of the Trustee, the Security Insurer or the Holders
of at least a majority of the Outstanding Amount of the Notes.
(d) If a responsible officer of the Owner Trustee shall have
actual knowledge of the occurrence of a Servicer Default under the Sale and
Servicing Agreement, the Issuer shall
promptly notify the Trustee, the Security Insurer and the Rating Agencies
thereof in accordance with Section 11.4, and shall specify in such notice the
action, if any, the Issuer is taking in respect of such default. If a Servicer
Default shall arise from the failure of the Servicer to perform any of its
duties or obligations under the Sale and Servicing Agreement with respect to the
Receivables, the Issuer shall take all reasonable steps available to it to
remedy such failure.
(e) If an Insurer Default shall have occurred and be
continuing and if the Issuer has given notice of termination to the Servicer of
the Servicer's rights and powers pursuant to Section 8.1 of the Sale and
Servicing Agreement, as promptly as possible thereafter, the Issuer shall
appoint a successor servicer in accordance with Section 8.2 of the Sale and
Servicing Agreement.
(f) Upon any termination of the Servicer's rights and
powers pursuant to the Sale and Servicing Agreement, the Issuer
shall promptly notify the Trustee. As soon as a Successor
Servicer (other than the Trustee) is appointed, the Issuer shall notify the
Trustee of such appointment, specifying in such
notice the name and address of such Successor Servicer.
(g) The Issuer agrees that it will not waive timely
performance or observance by the Servicer, the Seller or the Representative of
their respective duties under the Basic Documents (x) without the prior consent
of the Security Insurer (unless an Insurer Default shall have occurred and be
controlling) or (y) if the effect thereof would adversely affect
the Holders of the Notes.
SECTION 3.8. NEGATIVE COVENANTS. So long as any Notes
are Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture or the
Basic Documents, sell, transfer, exchange or otherwise dispose of any
of the properties or assets of the Issuer, including those included in
the Trust Estate, unless directed to do so by the Controlling Party;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust
Estate; or
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien in favor of
the Indenture Collateral Agent created by this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations with respect to
the Notes under this Indenture except as may be expressly permitted
hereby,
(B) permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien of this Indenture)
to be created on or extend to or other- wise arise upon or burden the
Trust Estate or any part thereof or any interest therein or the
proceeds thereof (other than tax liens, mechanics' liens and other
liens that arise by operation of law, in each case on a Financed
Vehicle and arising solely as a result of an action or omission of the
related Obligor), (C) permit the lien of this Indenture not to
constitute a valid first priority (other than with respect to any such
tax, mechanics' or other lien) security interest in the Trust Estate or
(D) amend, modify or fail to comply with the provisions of the Basic
Documents without the prior written consent of the Controlling Party.
SECTION 3.9. ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will
deliver to the Trustee and the Security Insurer, within 120 days after the end
of each fiscal year of the Issuer (commencing with the fiscal year ended
December 31, 1997), and otherwise in compliance with the requirements of TIA
Section 314(a)(4) an Officer's Certificate stating, as to the Authorized
Officer signing such Officer's Certificate, that
(i) a review of the activities of the Issuer during such
year and of performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge,
based on such review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such year, or, if there has
been a default in the compliance of any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
SECTION 3.10. ISSUER MAY CONSOLIDATE, ETC. ONLY ON
CERTAIN TERMS. (a) The Issuer shall not consolidate or merge
with or into any other Person, unless
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America or any state
and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee and the Security Insurer (so long as no Insurer Default shall
have occurred and be continuing), the due and punctual payment of the
principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Trustee and the
Security Insurer (so long as no Insurer Default shall have occurred and
be continuing)) to the effect that such transaction will not have any
material adverse tax consequence to the Trust, the Security Insurer,
any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien
and security interest created by this Indenture shall have
been taken;
(vi) the Issuer shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel each
stating that such consolidation or merger and such supplemental
indenture comply with this Article III and that all conditions
precedent herein provided for relating to such transaction have been
complied with (including any filing required by the Exchange Act); and
(vii) so long as no Insurer Default shall have occurred
and be continuing, the Issuer shall have given the
Security Insurer written notice of such consolidation or merger at
least 20 Business Days prior to the consummation of such action and
shall have received the prior written approval of the Security Insurer
of such consolidation or merger and the Issuer or the Person (if other
than the Issuer) formed by or surviving such consolidation or merger
has a net worth, immediately after such consolidation or merger, that
is (a) greater than zero and (b) not less than the net worth of the
Issuer immediately prior to giving effect to such consolidation or
merger.
(b) The Issuer shall not convey or transfer all or
substantially all of its properties or assets, including those
included in the Trust Estate, to any Person, unless
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which
is hereby restricted shall (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America
or any state, (B) expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to
the Trustee, and the Security Insurer (so long as no Insurer Default
shall have occurred and be continuing), the due and punctual payment of
the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture and each
of the Basic Documents on the part of the Issuer to be performed or
observed, all as provided herein, (C) expressly agree by means of such
supplemental indenture that all right, title and interest so conveyed
or transferred shall be subject and subordinate to the rights of
Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agree to indemnify, defend and hold
harmless the Issuer against and from any loss, liability or expense
arising under or related to this Indenture and the Notes and (E)
expressly agree by means of such supplemental indenture that such
Person (or if a group of persons, then one specified Person) shall
prepare (or cause to be prepared) and make all filings with the
Commission (and any other appropriate Person) required by the Exchange
Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Trustee and the
Security Insurer (so long as no Insurer Default shall have occurred and
be continuing)) to the effect that such transaction will not have any
material adverse tax consequence to the Trust, the Security Insurer,
any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien
and security interest created by this Indenture shall have
been taken; and
(vi) the Issuer shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each
stating that such conveyance or transfer and such supplemental
indenture comply with this Article III and that all conditions
precedent herein provided for relating to such transaction have been
complied with (including any filing required by the Exchange Act); and
(vii) so long as no Insurer Default shall have occurred
and be continuing, the Issuer shall have given the
Security Insurer written notice of such conveyance or transfer at least
20 Business Days prior to the consummation of such action and shall
have received the prior written approval of the Security Insurer of
such consolidation or merger and the Issuer or the Person (if other
than the Issuer) formed by or surviving such consolidation or merger
has a net worth, immediately after such consolidation or merger, that
is (a) greater than zero and (b)not less than the net worth of the
Issuer immediately prior to giving effect to such consolidation or
merger.
SECTION 3.11. SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation
or merger of the Issuer in accordance with Section 3.10(a), the Person formed by
or surviving such consolidation or merger (if other than the Issuer) shall
succeed to, and be substituted for, and may exercise every right and power of,
the Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and
properties of the Issuer pursuant to Section 3.10 (b), The Money Store Auto
Trust 1997-2 will be released from every covenant and agreement of this
Indenture to be observed or performed on the part of the Issuer with respect to
the Notes immediately upon the delivery of written notice to the Trustee stating
that The Money Store Auto Trust 1997-2 is to be so released.
SECTION 3.12. NO OTHER BUSINESS. The Issuer shall not
engage in any business other than financing, purchasing, owning,
selling and managing the Receivables in the manner contemplated
by this Indenture and the Basic Documents and activities
incidental thereto. After the Funding Period, the Issuer shall
not fund the purchase of any additional Receivables.
SECTION 3.13. NO BORROWING. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes, (ii) obligations owing from time to time
to the Security Insurer under the Insurance Agreement and (iii) any other
Indebtedness permitted by or arising under the Basic Documents or the Issuer's
compliance therewith. The proceeds of the Notes and the Certificates shall be
used exclusively to fund the Issuer's purchase of the Receivables and the other
assets specified in the Sale and Servicing Agreement to fund the Pre-Funding
Account and the Capitalized Interest Account and to pay the Issuer's
organizational, transactional and start-up expenses.
SECTION 3.14. SERVICER'S OBLIGATIONS. The Issuer shall cause the
Servicer to comply with Sections 4.9, 4.10, 4.11 and 5.8 of the Sale and
Servicing Agreement.
SECTION 3.15. GUARANTEES, LOANS, ADVANCES AND OTHER
LIABILITIES. Except as contemplated by the Sale and Servicing
Agreement or this Indenture, the Issuer shall not make any loan
or advance or credit to, or guarantee (directly or indirectly or
by an instrument having the effect of assuring another's payment or performance
on any obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other Person.
SECTION 3.16. CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. COMPLIANCE WITH LAWS. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
Basic Document.
SECTION 3.18. RESTRICTED PAYMENTS. The Issuer shall not,
directly or indirectly, (i) pay any dividend or make any
distribution (by reduction of capital or otherwise), whether in
cash, property, securities or a combination thereof, to the
Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity
interest or security in or of the Issuer or to the Servicer,
(ii) redeem, purchase, retire or otherwise acquire for value
any such owner- ship or equity interest or security or (iii) set
aside or otherwise segregate any amounts for any such purpose;
PROVIDED, HOWEVER, that the Issuer may make, or cause to be
made, distributions to the Servicer, the Owner Trustee, the
Security Insurer, the Trustee, the Indenture Collateral Agent
and the Certificateholders as permitted by, and to the extent
funds are available for such purpose under, the Sale and
Servicing Agreement or Trust Agreement. The Issuer will not,
directly or indirectly, make payments to or distributions from
the Collection Account except in accordance with this Indenture
and the Basic Documents.
SECTION 3.19. NOTICE OF EVENTS OF DEFAULT. Upon a
responsible officer of the Owner Trustee having actual knowledge
thereof, the Issuer agrees to give the Trustee, the Security Insurer and the
Rating Agencies prompt written notice of each Event of Default hereunder and
each default on the part of the Servicer or the Seller of its obligations under
the Sale and Servicing Agreement.
SECTION 3.20.FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee or the Security Insurer, the Issuer will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
SECTION 3.21. AMENDMENTS OF SALE AND SERVICING AGREEMENT
AND TRUST AGREEMENT. The Issuer shall not agree to any
amendment to Section 11.1 of the Sale and Servicing Agreement or
Section 11.1 of the Trust Agreement to eliminate the requirements thereunder
that the Trustee, the Security Insurer or the Holders of the Notes consent to
amendments thereto as provided therein.
SECTION 3.22. INCOME TAX CHARACTERIZATION. For purposes of federal
income, state and local income and franchise and any other income taxes, the
Issuer will treat the Notes as indebtedness of the Issuer.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. SATISFACTION AND DISCHARGE OF INDENTURE. This
Indenture shall cease to be of further effect with respect to the Notes except
as to (i) rights of registration of transfer
and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes,
(iii) rights of Noteholders to receive payments of principal thereof and
interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8, 3.10, 3.12, 3.13, 3.20, 3.21
and 3.22, (v) the rights, obligations and immunities of the Trustee hereunder
(including the rights of the Trustee under Section 6.7 and the obligations of
the Trustee under Section 4.2) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the Trustee
payable to all or any of them, and the Trustee, on demand of and at the expense
of the Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered
(other than (i) Notes that have been destroyed, lost or stolen
and that have been replaced or paid as provided in Section 2.5
and (ii) Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from
such trust, as provided in Section 3.3) have been delivered to
the Trustee for cancellation and the Note Policy has expired
and been returned to the Security Insurer for cancellation; or
(2) all Notes not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at their
respective Final Scheduled Distribution Dates
within one year, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by
the Trustee in the name, and at the expense, of
the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited
with the Indenture Collateral Agent cash or direct obligations
of or obligations guaranteed by the United States of America
(which will
mature prior to the date such amounts are payable), in trust
for such purpose, in an amount sufficient to pay and discharge
the entire indebtedness on such Notes not theretofore
delivered to the Trustee for cancellation when due to the
Final Scheduled Distribution Date or Redemption Date (if Notes
shall have been called for redemption pursuant to Section
10.1(a)), as the case may be;
(B) the Issuer has paid or caused to be paid all
Insurer Issuer Secured Obligations and all Trustee Issuer
Secured Obligations; and
(C) the Issuer has delivered to the Trustee, the Indenture
Collateral Agent and the Security Insurer an Officer's Certificate, an
Opinion of Counsel and, if required by the TIA, the Trustee, the
Indenture Collateral Agent or the Security Insurer (so long as an
Insurer Default shall not have occurred and be continuing) an
Independent Certificate from a firm of certified public accountants,
each meeting the applicable requirements of Section 11.1(a) and each
stating that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been complied
with.
SECTION 4.2. APPLICATION OF TRUST MONEY. All moneys deposited with
the Trustee pursuant to Section 4.1 hereof shall be held in trust and applied by
it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent, as the Trustee may
determine, to the Holders of the particular Notes for the payment or redemption
of which such moneys have been deposited with the Trustee, of all sums due and
to become due thereon for principal and interest; but such moneys need not be
segregated from other funds except to the extent required herein or in the Sale
and Servicing Agreement or required by law.
SECTION 4.3. REPAYMENT OF MONEYS HELD BY PAYING AGENT.
In connection with the satisfaction and discharge of this
Indenture with respect to the Notes, all moneys then held by any
Paying Agent other than the Trustee under the provisions of this Indenture with
respect to such Notes shall, upon demand of the Issuer, be paid to the Trustee
to be held and applied according to Section 3.3 and thereupon such Paying Agent
shall be released from all further liability with respect to such moneys.
ARTICLE V
REMEDIES
SECTION 5.1. EVENTS OF DEFAULT. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of
law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(i) default in the payment of any interest on any Note when
the same becomes due and payable, and such default shall continue for a
period of five days after receipt of notice thereof from the Trustee
(solely for purposes of this clause, a payment on the Notes funded by
the Security Insurer shall be deemed to be a payment made by the
Issuer); or
(ii) default in the payment of the principal of or any
installment of the principal of any Note when the same
becomes due and payable on the related Final Scheduled Distribution
Date (solely for purposes of this clause, a payment on the Notes funded
by the Security Insurer shall be deemed to be a payment made by the
Issuer); or
(iii) so long as an Insurer Default shall not have
occurred and be continuing, an Insurance Agreement Event of
Default shall have occurred; provided, however, that the occurrence of
an Insurance Agreement Event of Default may not form the basis of an
Event of Default unless the Security Insurer shall, upon prior written
notice to the Rating Agencies, have delivered to the Issuer and the
Trustee and not rescinded a written notice specifying that such
Insurance Agreement Event of Default constitutes an Event of Default
under the Indenture; or
(iv) so long as an Insurer Default shall have occurred
and be continuing, default in the observance or
performance of any covenant or agreement of the Issuer made in this
Indenture (other than a covenant or agreement, a default in the
observance or performance of which is elsewhere in this Section
specifically dealt with), or any representation or warranty of the
Issuer made in this Indenture or in any certificate or other writing
delivered pursuant hereto or in connection herewith proving to have
been incorrect in any material respect as of the time when the same
shall have been made, and such default shall continue or not be cured,
or the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been
eliminated or otherwise cured, for a period of 30 days
(or for such longer period, not in excess of 90 days, as may be
reasonably necessary to remedy such default; provided that such default
is capable of remedy within 90 days or less and the Servicer on behalf
of the Owner Trustee delivers an Officer's Certificate to the Trustee
to the effect that the Issuer has commenced, or will promptly commence
and diligently pursue, all reasonable efforts to remedy such default)
after there shall have been given, by registered or certified mail, to
the Issuer by the Trustee or to the Issuer and the Trustee by the
Holders of at least 25% of the Outstanding Amount of the Notes, a
written notice specifying such default or incorrect representation or
warranty and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder; or
(v) so long as an Insurer Default shall have occurred
and be continuing, the filing of a decree or order for
relief by a court having jurisdiction in the premises in respect of the
Issuer or any substantial part of the Trust Estate in an involuntary
case under any applicable Federal or state bankruptcy, insolvency or
other similar law now or
hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the Trust Estate,
or ordering the winding-up or liquidation of the Issuer's affairs, and
such decree or order shall remain
unstayed and in effect for a period of 60 consecutive
days; or
(vi) so long as an Insurer Default shall have occurred
and be continuing, the commencement by the Issuer of a
voluntary case under any applicable Federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or the
consent by the Issuer to the entry of an order for relief in an
involuntary case under any such law, or the consent by the Issuer to
the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Trust Estate, or the making
by the Issuer of any general assignment for the benefit of creditors,
or the failure by the Issuer generally to pay its debts as such debts
become due, or the taking of action by the Issuer in furtherance of any
of the foregoing.
The Issuer shall deliver to the Trustee and the Security
Insurer, within five days after the occurrence thereof,
written notice in the form of an Officer's Certificate of any event which with
the giving of notice and the lapse of time would become an Event of Default
under clause (iii), its status and what action the Issuer is taking or proposes
to take with respect thereto.
SECTION 5.2. RIGHTS UPON EVENT OF DEFAULT. (a) If an
Insurer Default shall not have occurred and be continuing and an
Event of Default shall have occurred and be continuing, the Notes shall become
immediately due and payable at par, together with accrued interest thereon. If
an Event of Default shall have occurred and be continuing, the Controlling Party
may exercise any of the remedies specified in Section 5.4(a). In the event of
any acceleration of any Notes by operation of this Section 5.2, the Trustee
shall continue to be entitled to make claims under the Note Policy pursuant to
Section 5.18 hereof for Note Insured Payments on the Notes. Payments under the
Note Policy following acceleration of any Notes shall be applied by the Trustee:
FIRST: to Noteholders for amounts due and unpaid on
the Notes for interest, ratably, without preference or
priority of any kind, according to the amounts due and
payable on the Notes for interest; and
SECOND: to Noteholders for amounts due and unpaid on
the Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and
payable on the Notes for principal.
(b) In the event any Notes are accelerated due to an Event of
Default, the Security Insurer shall have the right (in addition to its
obligation to pay Note Insured Payments on the Notes in accordance with the Note
Policy), but not the obligation, to make payments under the Note Policy or
otherwise of interest and principal due on such Notes, in whole or in part, on
any date or dates following such acceleration as the Security Insurer, in its
sole discretion, shall elect.
(c) If an Insurer Default shall have occurred and be
continuing and an Event of Default shall have occurred and be continuing, the
Trustee in its discretion may, or if so requested in writing by Holders holding
Notes representing not less than a majority of the Outstanding Amount of the
Notes, declare by written notice to the Issuer that the Notes become, whereupon
they shall become, immediately due and payable at par, together with accrued
interest thereon.
(d) If an Insurer Default shall have occurred and be
continuing, then at any time after such declaration of acceleration of maturity
has been made and before a judgment or decree for payment of the money due has
been obtained by the Trustee as hereinafter in this Article V provided, the
Holders of Notes representing a majority of the Outstanding Amount of the Notes,
by written notice to the Issuer and the Trustee, may
rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Trustee
a sum sufficient to pay
(A) all payments of principal of and interest on
all Notes and all other amounts that would then be
due hereunder or upon such Notes if the Event of
Default giving rise to such acceleration had not
occurred; and
(B) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee and its
agents and counsel; and
(ii) all Events of Default, other than the nonpayment
of the principal of the Notes that has become due solely by
such acceleration, have been cured or waived as provided
in Section 5.12.
No such rescission shall affect any subsequent default or
impair any right consequent thereto.
SECTION 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
BY TRUSTEE (a) The Issuer covenants that if (i) default is made in the payment
of any interest on any Note when the same becomes due and payable, and such
default continues for
a period of five days, or (ii) default is made in the payment of the principal
of or any installment of the principal of any Note when the same becomes due and
payable, the Issuer will, upon demand of the Trustee, pay to it, for the benefit
of the Holders of the Notes, the whole amount then due and payable on such Notes
for principal and interest, with interest upon the overdue principal, and, to
the extent payment at such rate of interest shall be legally enforceable, upon
overdue installments of interest, at the applicable Interest Rate and in
addition thereto such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel.
(b) Each Issuer Secured Party hereby irrevocably and
unconditionally appoints the Controlling Party as the true and lawful
attorney-in-fact of such Issuer Secured Party for so long
as such Issuer Secured Party is not the Controlling Party, with full power of
substitution, to execute, acknowledge and deliver any notice, document,
certificate, paper, pleading or
instrument and to do in the name of the Controlling Party as well as in the
name, place and stead of such Issuer Secured Party such acts, things and deeds
for or on behalf of and in the name of such Issuer Secured Party under this
Indenture (including specifically under Section 5.4) and under the Basic
Documents which such Issuer Secured Party could or might do or which may be
necessary, desirable or convenient in such Controlling Party's sole discretion
to effect the purposes contemplated hereunder and under the Related Documents
and, without limitation, following the occurrence of an Event of Default,
exercise full right, power and authority to take, or defer from taking, any and
all acts with respect to the administration, maintenance or disposition of the
Trust Estate.
(c) If an Event of Default occurs and is continuing,
the Trustee may in its discretion but with the consent of the
Controlling Party and shall, at the direction of the Controlling
Party (except as provided in Section 5.3(d) below), proceed to protect and
enforce its rights and the rights of the Noteholders
by such appropriate Proceedings as the Trustee or the Controlling Party shall
deem most effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy
or legal or equitable right vested in the Trustee by this Indenture or by law.
(d) Notwithstanding anything to the contrary contained in this
Indenture (including without limitation Sections 5.4(a), 5.12, 5.13 and 5.17)
and regardless of whether an Insurer Default shall have occurred and be
continuing, if the Issuer fails to perform its obligations under Section 10.1(b)
hereof when and as due, the Trustee may in its discretion (and without the
consent of the Controlling Party) proceed to protect and enforce its rights and
the rights of the Noteholders by such appropriate proceedings as the Trustee
shall deem most effective to protect and enforce any such rights, whether for
specific performance of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy
or legal or equitable right vested in the Trustee by this Indenture or by law;
provided that the Trustee shall only be entitled to take any such actions
without the consent of the Controlling Party to the extent such actions (x) are
taken only to enforce to Issuer's obligations to redeem the principal amount of
Notes and (y) are taken only against the portion of the Collateral, if any,
consisting of the Pre-Funding Account, the Capitalized Interest Account, any
investments therein and any proceeds thereof.
(e) In case there shall be pending, relative to the Issuer or
any other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, proceedings under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Trustee, irrespective of
whether the principal of any Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in
respect of the Notes and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the Trustee and
each predecessor Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor
Trustee, except as a result of negligence, bad faith or willful
misconduct) and of the Noteholders allowed in such proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or person performing similar functions in any such
proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the
Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have
the claims of the Trustee or the Holders of Notes allowed
in any judicial proceedings relative to the Issuer, its
creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by each of such Noteholders to make
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of payments directly to such Noteholders, to pay to the Trustee such
amounts as shall be sufficient to cover reasonable compensation to the Trustee,
each predecessor Trustee and their respective agents, attorneys and counsel, and
all other expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a result of negligence or bad
faith.
(f) Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting
the Notes or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Noteholder in any such proceeding except, as
aforesaid, to vote for the election of a trustee in bankruptcy or similar
person.
(g) All rights of action and of asserting claims under this
Indenture or under any of the Notes, may be enforced by the Trustee without the
possession of any of the Notes or the production thereof in any trial or other
proceedings relative thereto, and any such action or proceedings instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment, subject to the payment of the expenses, disbursements
and compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of the
Notes.
(h) In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture),
the Trustee shall be held to represent all the Holders of the Notes, and it
shall not be necessary to make any Noteholder a party to any such proceedings.
SECTION 5.4. REMEDIES. (a) If an Event of Default
shall have occurred and be continuing, the Controlling Party may
do one or more of the following (subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee of
an express trust for the collection of all amounts then payable on the
Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer and any other obligor upon such Notes moneys adjudged
due;
(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust
Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the rights
and remedies of the Trustee and the
Holders of the Notes; and
(iv) direct the Indenture Collateral Agent to sell the
Trust Estate or any portion thereof or rights or interest
therein, at one or more public or private sales called and
conducted in any manner permitted by law; PROVIDED,
however, that
(A) if the Security Insurer is the Controlling Party,
the Security Insurer may not sell or otherwise liquidate the
Trust Estate following an Insurance Agreement Event of Default
unless
(I) such Insurance Agreement Indenture
Cross Default arises from a claim being made on the
Note Policy or from the insolvency of the Trust or
the Seller, or
(II) the proceeds of such sale or
liquidation distributable to the Noteholders are
sufficient to discharge in full all amounts then due
and unpaid upon such Notes for principal and
interest; or
(B) if the Trustee is the Controlling Party, the
Trustee may not sell or otherwise liquidate the Trust
Estate following an Event of Default unless
(I) such Event of Default is of the type
described in Section 5.01(i) or (ii), or
(II) either
(x) the Holders of 100% of the
Outstanding Amount of the Notes consent
thereto,
(y) the proceeds of such sale or
liquidation distributable to the Noteholders
are sufficient to discharge in full all
amounts then due and unpaid upon such Notes
for principal and interest, or
(z) the Trustee determines that the
Trust Estate will not continue to provide
sufficient funds for the payment of
principal of and interest on the Notes as
they would have become due if the Notes had
not been declared due and payable, and the
Trustee provides prior written notice to the
Rating Agencies and obtains the consent of
Holders of 66-2/3% of the Outstanding Amount
of the Notes.
In determining such sufficiency or insufficiency with respect
to clause (y) and (z), the Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of
the Trust Estate for such purpose.
SECTION 5.5. OPTIONAL PRESERVATION OF THE RECEIVABLES. If the
Trustee is the Controlling Party and if the Notes have been declared to be due
and payable under Section 5.2 following an Event of Default and such declaration
and its consequences have not been rescinded and annulled, the Trustee may, but
need not, elect to maintain possession of the Trust Estate. It is the desire of
the parties hereto and the Noteholders that there be at all times sufficient
funds for the payment of principal of and interest on the Notes, and the Trustee
shall take such desire into account when determining whether or not to maintain
possession of the Trust Estate. In determining whether to maintain possession
of the Trust Estate, the Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose.
SECTION 5.6. PRIORITIES.
(a) Following (1) the acceleration of the Notes pursuant to
Section 5.2 or (2) if an Insurer Default shall have occurred and be continuing,
the occurrence of an Event of Default pursuant to Section 5.1(i), 5.1(ii),
5.1(iii), 5.1(v) or 5.1(vi) of the Indenture or (3) the receipt of Insolvency
Proceeds pursuant to Section 9.1(b) of the Sale and Servicing Agreement, the
Distribution Amount, including any money or property collected pursuant to
Section 5.4 of the Indenture any such Insolvency Proceeds, shall be applied by
the Trustee on the related Payment Date in the following order of priority:
FIRST: amounts due and owing and required to be
distributed to the Servicer, the Owner Trustee, the Trustee
and the Indenture Collateral Agent, respectively, pursuant
to priorities (i) and (ii) of Section 5.6(b) of the Sale
and Servicing Agreement and not previously distributed, in the order of
such priorities and without preference or priority of any kind within
such priorities;
SECOND: to Noteholders for amounts due and unpaid on
the Notes for interest, ratably, without preference or
priority of any kind, according to the amounts due and
payable on the Notes for interest;
THIRD: to Noteholders for amounts due and unpaid on
the Notes for principal and premium, ratably, without
preference or priority of any kind, according to the
amounts due and payable on the Notes for principal;
FOURTH: amounts due and unpaid on the Certificates
for interest, principal and premium, to the Owner Trustee
for distribution to Certificateholders in accordance with
Section 5.2(d) of the Trust Agreement;
FIFTH: amounts due and owing and required to be
distributed to the Security Insurer pursuant to priority
(vii) of Section 5.6(b) of the Sale and Servicing Agreement
and not previously distributed; and
SIXTH: to or upon the order of the Seller;
provided that any amounts collected from the Pre-Funding Account
or the Capitalized Interest Account shall be paid, FIRST, for
amounts due and unpaid on the Notes for principal and premium, if any, for
distribution to Noteholders in accordance with Section 10.1(b) and, SECOND, for
amounts due and unpaid on the Certificates for principal and premium, if any, in
accordance with Section 5.6(b) of the Sale and Servicing Agreement and, THIRD in
accordance with priorities ONE through SIXTH above.
(b) The Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section. At least 15 days before such
record date the Issuer shall mail to each Noteholder and the Trustee a notice
that states the record date, the payment date and the amount to be paid.
SECTION 5.7. LIMITATION OF SUITS. No Holder of any Note shall have
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such Holder has previously given written notice
to the Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding
Amount of the Notes have made written request to the Trustee to
institute such proceeding in respect of such Event of Default in its
own name as Trustee hereunder;
(iii) such Holder or Holders have offered to the Trustee
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to
institute such proceedings;
(v) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority of the Outstanding Amount of the Notes; and
(vi) an Insurer Default shall have occurred and be
continuing;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or
to obtain or to seek to obtain priority or preference over any other Holders or
to enforce any right under this Indenture, except in the manner herein provided.
In the event the Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the Outstanding Amount of the Notes,
the Trustee shall proceed in accordance with the request of the greater majority
of the Outstanding Amount of the Notes, as determined by reference to such
requests.
SECTION 5.8. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE
PRINCIPAL AND INTEREST. Notwithstanding any other provisions in this Indenture,
the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on
such Note on or after the respective due dates thereof expressed in such Note or
in this Indenture (or, in the case of redemption, on or after the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
right shall not be impaired without the consent of such Holder.
SECTION 5.9. RESTORATION OF RIGHTS AND REMEDIES. If the
Controlling Party or any Noteholder has instituted any
proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any
reason or has been determined adversely to the Trustee or to
such Noteholder, then and in every such case the Issuer, the
Trustee and the Noteholders shall, subject to any determination
in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Noteholders shall continue as though no such
proceeding had been instituted.
SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy
herein conferred upon or reserved to the Controlling Party or to the Noteholders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. DELAY OR OMISSION NOT A WAIVER. No delay or omission
of the Controlling Party or any Holder of any Note to exercise any right or
remedy accruing upon any Default or Event of Default shall impair any such right
or remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this
Article V or by law to the Trustee or to the Noteholders may be
exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Noteholders, as the case may
be.
SECTION 5.12. CONTROL BY NOTEHOLDERS. If the Trustee is the
Controlling Party, the Holders of a majority of the Outstanding Amount of the
Notes shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee with respect to the Notes
or exercising any trust or power conferred on the Trustee; PROVIDED
that:
(i) such direction shall not be in conflict with any
rule of law or with this Indenture;
(ii) subject to the express terms of Section 5.4, any
direction to the Trustee to sell or liquidate the Trust Estate shall be
by the Holders of Notes representing not less than 100% of the
Outstanding Amount of the Notes;
(iii) if the conditions set forth in Section 5.5 have been
satisfied and the Trustee elects to retain the Trust Estate pursuant to
such Section, then any direction to the trustee by Holders of Notes
representing less than 100% of the Outstanding Amount of the Notes to
sell or liquidate the Trust Estate shall be of no force and effect; and
(iv) the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such
direction;
PROVIDED, HOWEVER, that, subject to Section 6.1, the Trustee need not take any
action that it determines might involve it in
liability or might materially adversely affect the rights of any Noteholders
not consenting to such action.
SECTION 5.13. WAIVER OF PAST DEFAULTS. If an Insurer Default shall
occurred and be continuing, prior to the declaration of the acceleration of the
maturity of the Notes as provided in Section 5.4, the Holders of Notes of not
less than a
majority of the Outstanding Amount of the Notes may waive any past Default or
Event of Default and its consequences except a Default (a) in payment of
principal of or interest on any of the
Notes or (b) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the Holder of each Note. In the case
of any such waiver, the Issuer, the
Trustee and the Holders of the Notes shall be restored to their
former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereto.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred,
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
SECTION 5.14. UNDERTAKING FOR COSTS. All parties to this
Indenture agree, and each Holder of any Note by such Holder's
acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in
any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant
in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Trustee, (b) any suit instituted by any Note- holder, or group of Noteholders,
in each case holding in the aggregate more than 10% of the Outstanding Amount of
the Notes or (c) any suit instituted by any Noteholder for the enforcement of
the payment of principal of or interest on any Note on or after the respective
due dates expressed in such Note and in this Indenture (or, in the case of
redemption, on or after the Redemption Date).
SECTION 5.15. WAIVER OF STAY OR EXTENSION LAWS. The
Issuer covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead or in any manner whatsoever,
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage
of any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 5.16. ACTION ON NOTES. The Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of
the Trustee or the Noteholders shall be impaired by the recovery of any
judgment by the Trustee against the Issuer or by the levy of any execution under
such judgment upon any portion of the Trust Estate or upon any of the assets of
the Issuer.
SECTION 5.17. PERFORMANCE AND ENFORCEMENT OF CERTAIN
OBLIGATIONS. (a) Promptly following a request from the Trustee
to do so and at the Servicer's expense, the Issuer agrees to take all such
lawful action as the Trustee may request to compel or secure the performance and
observance by the Representative, the Seller and the Servicer, as applicable, of
each of their obligations to the Issuer under or in connection with the Sale and
Servicing Agreement in accordance with the terms thereof, and to exercise any
and all rights, remedies, powers and privileges lawfully available to the Issuer
under or in connection with the Sale and Servicing Agreement to the extent and
in the manner directed by the Trustee, including the transmission of notices of
default on the part of the Seller or the Servicer thereunder and the institution
of legal or administrative actions or proceedings to compel or secure
performance by the Seller or the Servicer of each of their obligations under the
Sale and Servicing Agreement.
(b) If the Trustee is a Controlling Party and if an Event of
Default has occurred and is continuing, the Trustee may, and, at the direction
(which direction shall be in writing or by telephone (confirmed in writing
promptly thereafter)) of the Holders of 66-2/3% of the Outstanding Amount of the
Notes shall, exercise all rights, remedies, powers, privileges and claims of the
Issuer against the Seller or the Servicer under or in connection with the Sale
and Servicing Agreement, including the right or power to take any action to
compel or secure performance or observance by the Seller or the Servicer of each
of their obligations to the Issuer thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Sale and Servicing
Agreement, and any right of the Issuer to take such action shall be suspended.
SECTION 5.18. CLAIMS UNDER NOTE POLICY.
(a) In the event that the Trustee has delivered a Deficiency
Notice with respect to any Determination Date pursuant to Section 5.4 of the
Sale and Servicing Agreement, the Trustee shall on the related Draw Date
determine the Note Insured Payment (as defined below), if any, for the related
Payment Date. If the Note Insured Payment, if any, for such Payment Date is
greater than zero, the Trustee shall furnish to the Security Insurer on the
related Draw Date a completed notice form set forth as Exhibit A to the Note
Policy in accordance with the terms of the Note Policy in the amount of the Note
Insured Payment, if any. Amounts paid by the Security Insurer pursuant to a
claim submitted under this Section 5.18(a) shall be deposited by the Trustee
into the Note Distribution Account for payment to Noteholders on the related
Payment Date. The "Note Insured Payment" shall have the meaning as set forth in
the Note Policy.
(b) Any notice delivered by the Trustee to the Security
Insurer pursuant to subsection 5.18(a) shall specify the Note Insured Payment
claimed under the Note Policy and subject to the terms of the Note Policy, shall
constitute a "Notice" under the Note Policy. The Security Insurer is required to
pay to the Trustee the Note Insured Payment in accordance with the terms of the
Note Policy. Any payment made by the Security Insurer under the Note Policy
shall be applied solely to the payment of the Notes, and for no other purpose.
(c) The Trustee shall (i) receive as attorney-in-fact
of each Noteholder any Note Insured Payment from the Security
Insurer and (ii) deposit the same in the Note Distribution Account for
distribution to Noteholders as provided in Section 3.1 or Section 5.2 of this
Indenture. Any and all Note Insured Payments disbursed by the Trustee from
claims made under the Note Policy shall not be considered payment by the Trust
with respect to such Notes, and shall not discharge the obligations of the Trust
with respect thereto. The Security Insurer shall, to the extent it makes any
payment with respect to the Notes, become subrogated to the rights of the
recipients of such payments to the extent of such payments. Subject to and
conditioned upon any payment with respect to the Notes by or on behalf of the
Security Insurer, the Trustee shall assign to the Security Insurer all rights to
the payment of interest or principal with respect to the Notes which are then
due for payment to the extent of all payments made by the Security Insurer, and
the Security Insurer may exercise any option, vote, right, power or the like
with respect to the Notes to the extent that it has made payment pursuant to the
Note Policy. To evidence such subrogation, the Note Registrar shall note the
Security Insurer's rights as subrogee upon the register of Noteholders upon
receipt from the Security Insurer of proof of payment by the Security Insurer of
any Noteholders' Interest Distributable Amount or Noteholders' Principal
Distributable Amount. The foregoing subrogation shall in all cases be subject to
the rights of the Noteholders to receive all Note Insured Payments in respect of
the Notes.
(d) The Trustee shall keep a complete and accurate record of
all funds deposited by the Security Insurer into the Collection Account and the
allocation of such funds to payment of interest on and principal paid in respect
of any Note. The Security Insurer shall have the right to inspect such records
at reasonable times upon one Business Day's prior notice to the
Trustee.
(e) The Trustee shall be entitled to enforce on behalf of the
Noteholders the obligations of the Security Insurer under the Note Policy.
Notwithstanding any other provision of this Agreement or any Related Document,
the Noteholders are not entitled to institute proceedings directly against the
Security Insurer.
SECTION 5.19. PREFERENCE CLAIMS. (a) In the event that the Trustee
has received a certified copy of a final non-appealable order of the court of
applicable jurisdiction that any Noteholders' Interest Distributable Amount,
Noteholders' Principal Distributable Amount or Accelerated Principal
Distributable Amount paid on a Note has been avoided in whole or
in part as a preference payment under the United States Bankrutpcy Code (11
U.S.C.), (a "Note Preference Amount") the Trustee shall so notify the Security
Insurer, shall comply with the provisions of the Note Policy to obtain payment
by the Security Insurer of such Note Preference Amount and shall, at the time it
provides notice to the Security Insurer, notify Holders of the Notes by mail
that, in the event that any Noteholder's payment is so recoverable, such
Noteholder will be entitled to payment pursuant to the terms of the Note Policy.
The Trustee shall furnish to the Security Insurer its records evidencing the
payments of principal of and interest on Notes, if any, which have been made by
the Trustee and subsequently recovered from Noteholders, and the dates on which
such payments were made. Pursuant to the terms of the Note Policy, the Security
Insurer will make such payment on behalf of the Noteholder in the manner set
forth in the Note Policy.
(b) The Trustee shall promptly notify the Security
Insurer of any proceeding or the institution of any action (of
which the Trustee has actual knowledge) seeking the avoidance as
a preferential transfer under applicable bankruptcy, insolvency, receivership,
rehabilitation or similar law (a "Preference Claim") of any distribution made
with respect to the Notes. Each Holder, by its purchase of Notes, and the
Trustee hereby agree that so long as an Insurer Default shall not have occurred
and be continuing, the Security Insurer may at any time during the continuation
of any proceeding relating to a Preference Claim direct all matters relating to
such Preference Claim including, without limitation, (i) the direction of any
appeal of any order relating to any Preference Claim and (ii) the posting of any
surety, supersedeas or performance bond pending any such appeal at the expense
of the Security Insurer, but subject to reimbursement as provided in the
Insurance Agreement. In addition, and without limitation of the foregoing, as
set forth in Section 5.18(c), the Security Insurer shall be subrogated to, and
each Noteholder and the Trustee hereby delegate and assign, to the fullest
extent permitted by law, the rights of the Trustee and each Noteholder in the
conduct of any proceeding with respect to a Preference Claim, including, without
limitation, all rights of any party to an adversary proceeding action with
respect to any court order issued in connection with any such Preference Claim.
ARTICLE VI
THE TRUSTEE AND THE INDENTURE COLLATERAL AGENT
SECTION 6.1. DUTIES OF TRUSTEE. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of
Default:
(i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; however, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture and, if applicable, the Trustee's other Basic
Documents.
(c) The Trustee may not be relieved from liability
for its own negligent action, its own negligent failure to act
or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless
it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.12.
(d) The Trustee shall not be liable for interest on
any money received by it except as the Trustee may agree in
writing with the Issuer.
(e) Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law
or the terms of this Indenture or the Sale and Servicing
Agreement.
(f) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(g) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection
to the Trustee shall be subject to the provisions of this
Section and to the provisions of the TIA.
(h) The Trustee shall, upon reasonable prior notice to the
Trustee, permit any representative of the Security Insurer, at the Security
Insurer's expense, during the Trustee's normal business hours, to examine all
books of account, records, reports and other papers of the Trustee relating to
the Notes, to make copies and extracts therefrom and to discuss the Trustee's
affairs and actions, as such affairs and actions relate to the Trustee's duties
with respect to the Notes, with the Trustee's officers and employees responsible
for carrying out the Trustee's duties with respect to the Notes.
(i) The Trustee shall, and hereby agrees that it
will, perform all of the obligations and duties required of it
under the Sale and Servicing Agreement.
(j) The Trustee shall, and hereby agrees that it will, hold
the Note Policy in trust, and will hold any proceeds of any claim on the Note
Policy in trust solely for the use and benefit of the Noteholders.
(k) Without limiting the generality of this Section
6.1, the Trustee shall have no duty (i) to see to any recording,
filing or depositing of this Indenture or any agreement referred to herein or
any financing statement evidencing a security interest in the Financed Vehicles,
or to see to the maintenance of any such recording or filing or depositing or to
any recording, refiling or redepositing of any thereof, (ii) to see to any
insurance of the Financed Vehicles or Obligors or to
effect or maintain any such insurance, (iii) to see to the payment or discharge
of any tax, assessment or other governmental charge or any Lien or encumbrance
of any kind owing with respect to, assessed or levied against any part of the
Trust, (iv) to confirm or verify the contents of any reports or certificates
delivered to the Trustee pursuant to this Indenture or the Sale and Servicing
Agreement believed by the Trustee to be genuine and to have been signed or
presented by the proper party or parties, or (v) to inspect the Financed
Vehicles at any time or ascertain or inquire as to the performance of observance
of any of the Issuer's, the Seller's or the Servicer's representations,
warranties or covenants or the Servicer's duties and obligations as Servicer and
as custodian of the Receivable Files under the Sale and Servicing Agreement.
SECTION 6.2. RIGHTS OF TRUSTEE. (a) The Trustee may
rely on any document believed by it to be genuine and to have
been signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officer's Certificate or Opinion of Counsel.
(c) The Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys or a custodian or nominee, and the
Trustee shall not be responsible for any misconduct or negligence on the part
of, or for the supervision of, The Money Store Auto Finance Inc., or any other
such agent, attorney, custodian or nominee appointed with due care by it
hereunder.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be
authorized or within its rights or powers; PROVIDED, HOWEVER, that the Trustee's
conduct does not constitute willful misconduct, negligence or bad faith.
(e) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such
counsel.
(f) The Trustee shall be under no obligation to
institute, conduct or defend any litigation under this Indenture
or in relation to this Indenture, at the request, order or direction of any of
the Holders of Notes or the Controlling Party, pursuant to the provisions of
this Indenture, unless such
Holders of Notes or the Controlling Party shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or
thereby; PROVIDED, HOWEVER, that the Trustee shall, upon the occurrence of an
Event of Default (that has not been cured), exercise the rights and powers
vested in it by this Indenture with reasonable care and skill.
(g) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Security
Insurer (so long as no Insurer Default shall have occurred and be continuing) or
(if an Insurer Default shall have occurred and be continuing) by the Holders of
Notes evidencing not less than 25% of the Outstanding Amount thereof; PROVIDED,
HOWEVER, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture or the
Sale and Servicing Agreement, the Trustee may require reasonable indemnity
against such cost, expense or liability as a condition to so proceeding; the
reasonable expense of every such examination shall be paid by the Person making
such request, or, if paid by the Trustee, shall be reimbursed by the Person
making such request upon demand.
SECTION 6.3. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.4. TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture, the Trust Estate or the Notes, it shall not be accountable for
the Issuer's use of the proceeds from the Notes, and it shall not be responsible
for any
statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustee's
certificate of authentication.
SECTION 6.5. NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is either known by, or written notice of the existence
thereof has been delivered to, a Responsible Officer of the Trustee, the Trustee
shall mail to each Noteholder notice of the Default within 90 days after such
knowledge or notice occurs and to the Security Insurer such notice promptly
after such knowledge or notice occurs. Except in the case of a Default in
payment of principal of or interest on any Note (including payments pursuant to
the mandatory redemption provisions of such Note), the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Noteholders.
SECTION 6.6. REPORTS BY TRUSTEE TO HOLDERS. The Trustee shall
deliver to each Noteholder such information as may be reasonably required to
enable such Holder to prepare its Federal and state income tax returns.
SECTION 6.7. COMPENSATION AND INDEMNITY. (a) Pursuant to Section
5.6(b) of the Sale and Servicing Agreement, the Issuer shall, or shall cause the
Servicer to, pay to the Trustee from time to time compensation for its services
in accordance with a separate agreement between the Servicer and the Trustee.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer shall or shall cause the Servicer to
reimburse the Trustee for all reasonable out-of-pocket expenses incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Issuer shall or shall cause the Servicer to indemnify the Trustee,
the Indenture Collateral Agent and their respective officers, directors,
employees and agents against any and all loss, liability or expense (including
attorneys' fees and expenses) incurred by it in connection with the acceptance
or the administration of this trust and the performance of its duties hereunder.
The Trustee shall notify the Issuer and the Servicer promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Issuer and
the Servicer shall not relieve the Issuer of its obligations hereunder or the
Servicer of its obligations under Article X of the Sale and Servicing Agreement.
The Issuer shall or shall cause the Servicer to defend the claim, the Trustee
may have separate counsel and the Issuer shall or shall cause the Servicer to
pay the fees and expenses of such counsel. Neither the Issuer nor the Servicer
need reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee's own willful misconduct, negligence
or bad faith.
(b) The Issuer's payment obligations to the Trustee pursuant
to this Section shall survive the discharge of this Indenture subject to a
satisfaction of the Rating Agency Condition. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 5.1(iv) or (v) with
respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
Federal or state bankruptcy, insolvency or similar law. Notwithstanding anything
else set forth in this Indenture or the Basic Documents, the Trustee agrees that
the obligations of the Issuer (but not the Servicer) to the Trustee hereunder
and under the Basic Documents shall be recourse to the Trust Estate only and
specifically shall not be recourse to the assets of the General Partner of the
Issuer or any Certificateholder. In addition, the Trustee agrees that its
recourse to the Issuer, the Trust Estate and the Seller shall be limited to the
right to receive the distributions referred to in Section 5.6(b)(ix) of the Sale
and Servicing Agreement.
SECTION 6.8. REPLACEMENT OF TRUSTEE. The Trustee may
resign at any time by so notifying the Issuer and the Security
Insurer. The Issuer may with the consent of the Insurer and, at
the request of the Security Insurer (unless an Insurer Default
shall have occurred and be continuing) shall, remove the
Trustee, if:
(i) the Trustee fails to comply with Section 6.11;
(ii) a court having jurisdiction in the premises in
respect of the Trustee in an involuntary case or proceeding
under federal or state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, shall have entered a decree or order
granting relief or appointing a receiver, liquidator, assignee,
custodian, trustee, conservator, sequestrator (or similar official) for
the Trustee or for any substantial part of the Trustee's property, or
ordering the winding-up or liquidation of the Trustee's affairs;
(iii) an involuntary case under the federal bankruptcy laws,
as now or hereafter in effect, or another present or future federal or
state bankruptcy, insolvency or similar law is commenced with respect
to the Trustee and such case is not dismissed within 60 days;
(iv) the Trustee commences a voluntary case under any federal
or state banking or bankruptcy laws, as now or hereafter constituted,
or any other applicable federal or state bankruptcy, insolvency or
other similar law, or consents to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator (or other similar official) for the Trustee
or for any substantial part of the Trustee's property, or makes any
assignment for the benefit of creditors or fails generally to pay its
debts as such debts
become due or takes any corporate action in furtherance of
any of the foregoing; or
(v) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Issuer shall promptly appoint a
successor Trustee acceptable to the Security Insurer (so long as an Insurer
Default shall not have occurred and be continuing). If the Issuer fails to
appoint such a successor Trustee, the Security Insurer may appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Issuer
and the Security Insurer (provided that no Insurer Default shall have occurred
and be continuing). Thereupon the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture subject to satisfaction of
the Rating Agency Condition. The successor Trustee shall mail a notice of its
succession to Noteholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Issuer or the Holders of a majority in Outstanding Amount of the Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor Trustee
pursuant to Section 6.8 and payment of all fees and expenses owed to the
outgoing Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section, the
Issuer's and the Servicer's obligations under Section 6.7 shall continue for the
benefit of the retiring Trustee.
SECTION 6.9. SUCCESSOR TRUSTEE BY MERGER. If the
Trustee consolidates with, merges or converts into, or transfers
all or substantially all its corporate trust business or assets
to, another corporation or banking association, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee. The Trustee shall provide the Rating Agencies prior written
notice of any such transaction.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed
to the trusts created by this Indenture any of the Notes shall
have been authenticated but not delivered, any such successor to
the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated;
and in case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee may authenticate such Notes either in the name of any
predecessor hereunder or in the name of the successor to the Trustee; and in all
such cases such certificates shall have the full force which it is anywhere in
the Notes or in this Indenture provided that the certificate of the Trustee
shall have.
SECTION 6.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Trust may at the time be located, the Trustee with the consent of the
Security Insurer (so long as an Insurer Default shall not have occurred and be
continuing) shall have the power and may execute
and deliver all instruments to appoint one or more Persons to act as a
co-trustee or co-trustees, or a separate trustee or separate trustees, of all or
any part of the Trust, and to vest in such Person or Persons, in such capacity
and for the benefit of the Noteholders, such title to the Trust, or any part
hereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as a successor trustee under Section 6.11 and no
notice to Noteholders of the appointment of any co-trustee or separate trustee
shall be required under Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to
the extent permitted by law, be appointed and act subject to the
following provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or
imposed upon and exercised or performed by the Trustee and
such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in
such act), except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed the Trustee
shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the
holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder, including
acts or omissions of predecessor or successor trustees; and
(iii) the Trustee may at any time accept the
resignation of or remove any separate trustee or
co-trustee.
(c) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as if given to
each of them. Every instrument appointing any separate trustee
or co-trustee shall refer to this Agreement and the conditions
of this Article VI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Indenture on its behalf and in its name. If any separate trustee
or co-trustee shall die, dissolve, become insolvent, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall invest in and be exercised by the Trustee, to the extent permitted
by law, without the appointment of a new or successor trustee.
SECTION 6.11. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at
all times satisfy the requirements of TIA Section 310(a). The Trustee shall have
a combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition and it shall have a long term debt
rating of BBB- or better by the Rating Agencies. The Trustee shall provide
copies of such reports to the Security Insurer upon request. The Trustee shall
comply with TIA Section
310(b), including the optional provision permitted by the second sentence of
TIA Section 310(b)(9); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities of the Issuer are outstanding if the requirements for such exclusion
set forth in TIA Section 310(b)(1) are met.
SECTION 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
SECTION 6.13. APPOINTMENT AND POWERS. Subject to the terms and
conditions hereof, each of the Issuer Secured Parties hereby appoints The Chase
Manhattan Bank as the Indenture Collateral Agent with respect to the Collateral,
and The Chase Manhattan Bank hereby accepts such appointment and agrees to act
as Indenture Collateral Agent with respect to the Collateral for the Issuer
Secured Parties, to maintain custody and possession of such Collateral (except
as otherwise provided hereunder) and to perform the other duties of the
Indenture Collateral Agent in accordance with the provisions of this Indenture.
Each Issuer Secured Party hereby authorizes the Indenture Collateral Agent to
take such action on its behalf, and to exercise such rights, remedies, powers
and privileges hereunder, as the Controlling Party may direct and as are
specifically authorized to be exercised by the Indenture Collateral Agent by the
terms hereof, together with such actions, rights, remedies, powers and
privileges as are reasonably incidental thereto. The Indenture Collateral Agent
shall act upon and in compliance with the written instructions of the
Controlling Party delivered pursuant to this Indenture promptly following
receipt of such written instructions; provided that the Indenture Collateral
Agent shall not act in accordance with any instructions (i) which are not
authorized by, or in violation of the provisions of, this Indenture, (ii) which
are in violation of any applicable law, rule or regulation or (iii) for which
the Indenture Collateral Agent has not received reasonable indemnity. Receipt of
such instructions shall not be a condition to the exercise by the Indenture
Collateral Agent of its express duties hereunder, except where this Indenture
provides that the Indenture Collateral Agent is permitted to act only following
and in accordance with such instructions.
SECTION 6.14. PERFORMANCE OF DUTIES. The Indenture
Collateral Agent shall have no duties or responsibilities except
those expressly set forth in this Indenture and the other Basic Documents to
which the Indenture Collateral Agent is a party or as directed by the
Controlling Party in accordance with this
Indenture. The Indenture Collateral Agent shall not be required
to take any discretionary actions hereunder except at the
written direction and with the indemnification of the Controlling Party. The
Indenture Collateral Agent shall, and hereby agrees that it will, perform all of
the duties and obligations required of it under the Sale and Servicing
Agreement.
SECTION 6.15. LIMITATION ON LIABILITY. Neither the
Indenture Collateral Agent nor any of its directors, officers or
employees shall be liable for any action taken or omitted to be
taken by it or them hereunder, or in connection herewith,
except that the Indenture Collateral Agent shall be liable for its negligence,
bad faith or willful misconduct; nor shall the Indenture Collateral Agent be
responsible for the validity, effectiveness, value, sufficiency or
enforceability against the Issuer of this Indenture or any of the Collateral (or
any part thereof). Notwithstanding any term or provision of this Indenture, the
Indenture Collateral Agent shall incur no liability to the Issuer or the Issuer
Secured Parties for any action taken or omitted by the Indenture Collateral
Agent in connection with the Collateral, except for the negligence, bad faith or
willful misconduct on the part of the Indenture Collateral Agent, and, further,
shall incur no liability to the Issuer Secured Parties except for negligence,
bad faith or willful misconduct in carrying out its duties to the Issuer Secured
Parties. Subject to Section 6.16, the Indenture Collateral Agent shall be
protected and shall incur no liability
to any such party in relying upon the accuracy, acting in reliance upon the
contents, and assuming the genuineness of any notice, demand, certificate,
signature, instrument or other document reasonably believed by the Indenture
Collateral Agent to be genuine and to have been duly executed by the appropriate
signatory, and (absent actual knowledge to the contrary) the Indenture
Collateral Agent shall not be required to make any independent investigation
with respect thereto. The Indenture Collateral Agent shall at all times be free
independently to establish to its reasonable satisfaction, but shall have no
duty
to independently verify, the existence or nonexistence of facts
that are a condition to the exercise or enforcement of any
right or remedy hereunder or under any of the Related Documents. The Indenture
Collateral Agent may consult with counsel, and shall not be liable for any
action taken or omitted to be taken by it hereunder in good faith and in
accordance with the written advice of such counsel. The Indenture Collateral
Agent shall not be under any obligation to exercise any of the remedial rights
or powers vested in it by this Indenture or to follow any direction from the
Controlling Party unless it shall have received reasonable security or indemnity
satisfactory to the Indenture Collateral Agent against the costs, expenses and
liabilities which might be incurred by it.
SECTION 6.16. RELIANCE UPON DOCUMENTS. In the absence of negligence,
bad faith or willful misconduct on its part, the Indenture Collateral Agent
shall be entitled to rely on any communication, instrument, paper or other
document reasonably believed by it to be genuine and correct and to have been
signed
or sent by the proper Person or Persons and shall have no liability in acting,
or omitting to act, where such action or omission to act is in reasonable
reliance upon any statement or opinion contained in any such document or
instrument.
SECTION 6.17. SUCCESSOR INDENTURE COLLATERAL AGENT. (a)
MERGER. Any Person into which the Indenture Collateral Agent
may be converted or merged, or with which it may be
consolidated, or to which it may sell or transfer its trust
business and assets as a whole or substantially as a whole, or
any Person resulting from any such conversion, merger,
consolidation, sale or transfer to which the Indenture
Collateral Agent is a party, shall (provided it is otherwise
qualified to serve as the Indenture Collateral Agent hereunder)
be and become a successor Indenture Collateral Agent hereunder
and be vested with all of the title to and interest in the
Collateral and all of the trusts, powers, discretions,
immunities, privileges and other matters as was its predecessor
without the execution or filing of any instrument or any
further act, deed or conveyance on the part of any of the
parties hereto, anything herein to the contrary
notwithstanding, except to the extent, if any, that any such
action is necessary to perfect, or continue the perfection of,
the security interest of the Issuer Secured Parties in the
Collateral; provided that any such successor shall also be the
successor Trustee under Section 6.9.
(b) RESIGNATION. The Indenture Collateral Agent and any
successor Indenture Collateral Agent may resign at any time by so notifying the
Issuer and the Security Insurer; provided that the Indenture Collateral Agent
shall not so resign unless it shall also resign as Trustee hereunder.
(c) REMOVAL. The Indenture Collateral Agent may be removed by
the Controlling Party at any time (and shall be removed at any time that the
Trustee has been removed), with or without cause, by an instrument or concurrent
instruments in writing delivered to the Indenture Collateral Agent, the other
Issuer Secured Party and the Issuer. A temporary successor may be removed at any
time to allow a successor Indenture Collateral
Agent to be appointed pursuant to subsection (d) below. Any removal pursuant to
the provisions of this subsection (c) shall take effect only upon the date which
is the latest of (i) the effective date of the appointment of a successor
Indenture Collateral Agent and the acceptance in writing by such successor
Indenture Collateral Agent of such appointment and of its obligation to perform
its duties hereunder in accordance with the provisions hereof, and (ii) receipt
by the Controlling Party of an Opinion of Counsel to the effect described in
Section 3.6.
(d) ACCEPTANCE BY SUCCESSOR. The Controlling Party shall have
the sole right to appoint each successor Indenture Collateral Agent. Every
temporary or permanent successor Indenture Collateral Agent appointed hereunder
shall execute, acknowledge and deliver to its predecessor and to the Trustee,
each Issuer Secured Party and the Issuer an instrument in writing accepting such
appointment hereunder and the relevant predecessor shall execute, acknowledge
and deliver such other documents and instruments as will effectuate the delivery
of all Indenture Collateral to the successor Indenture Collateral Agent,
whereupon such successor, without any further act, deed or conveyance, shall
become fully vested with all the estates, properties, rights, powers, duties and
obligations of its predecessor. Such predecessor shall, nevertheless, on the
written request of either Issuer Secured Party or the Issuer, execute and
deliver an instrument transferring to such successor all the estates,
properties, rights and powers of such predecessor hereunder. In the event that
any instrument in writing from the Issuer or an Issuer Secured Party is
reasonably required by a successor Indenture Collateral Agent to more fully and
certainly vest in such successor the estates, properties, rights, powers, duties
and obligations vested or intended to be vested hereunder in the Indenture
Collateral Agent, any and all such written instruments shall, at the request of
the temporary or permanent successor Indenture Collateral Agent, be forthwith
executed, acknowledged and delivered by the Trustee or the Issuer, as the case
may be. The designation of any successor Indenture Collateral Agent and the
instrument or instruments removing any Indenture Collateral Agent and appointing
a successor hereunder, together with all other instruments provided for herein,
shall be maintained with the records relating to the Indenture Collateral and,
to the extent required by applicable law, filed or recorded by the successor
Indenture Collateral Agent in each place where such filing or recording is
necessary to effect the transfer of the Indenture Collateral to the successor
Indenture Collateral Agent
or to protect or continue the perfection of the security
interests granted hereunder.
SECTION 6.18. COMPENSATION. The Indenture Collateral Agent shall
not be entitled to any compensation for the performance of its duties hereunder
other than the compensation it is entitled to receive in its capacity as
Trustee.
SECTION 6.19. REPRESENTATIONS AND WARRANTIES OF THE
INDENTURE COLLATERAL AGENT. The Indenture Collateral Agent
represents and warrants to the Issuer and to each Issuer Secured
Party as follows:
(a) DUE ORGANIZATION. The Indenture Collateral Agent
is a New York banking corporation, duly organized, validly
existing and in good standing under the laws of the United States and is duly
authorized and licensed under applicable law to conduct its business as
presently conducted.
(b) CORPORATE POWER. The Indenture Collateral Agent
has all requisite right, power and authority to execute and
deliver this Indenture and to perform all of its duties as
Indenture Collateral Agent hereunder.
(c) DUE AUTHORIZATION. The execution and delivery by
the Indenture Collateral Agent of this Indenture and the other
Transaction Documents to which it is a party, and the performance by the
Indenture Collateral Agent of its duties hereunder and thereunder, have been
duly authorized by all necessary corporate proceedings and no further approvals
or filings, including any governmental approvals, are required for the valid
execution and delivery by the Indenture Collateral Agent, or the performance by
the Indenture Collateral Agent, of this Indenture and such other Related
Documents.
(d) VALID AND BINDING INDENTURE. The Indenture
Collateral Agent has duly executed and delivered this Indenture
and each other Related Document to which it is a party, and each
of this Indenture and each such other Related Document constitutes the legal,
valid and binding obligation of the Indenture Collateral Agent, enforceable
against the Indenture Collateral Agent in accordance with its terms, except as
(i) such enforceability may be limited by bankruptcy, insolvency, reorganization
and similar laws relating to or affecting the enforcement of creditors' rights
generally and (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability.
SECTION 6.20. WAIVER OF SETOFFS. The Indenture Collateral Agent and
the Trustee hereby expressly waive any and all rights of setoff that the
Indenture Collateral Agent or the
Trustee may otherwise at any time have under applicable law with respect to any
Trust Account and agrees that amounts in the Trust Accounts shall at all times
be held and applied solely in accordance with the provisions hereof.
SECTION 6.20. CONTROL BY THE CONTROLLING PARTY. The Indenture
Collateral Agent shall comply with notices and instructions given by the Issuer
only if accompanied by the written consent of the Controlling Party, except that
if any Event of Default shall have occurred and be continuing, the Indenture
Collateral Agent shall act upon and comply with notices and instructions given
by the Controlling Party alone in the place and stead of the Issuer.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1. ISSUER TO FURNISH TO TRUSTEE NAMES AND ADDRESSES OF
NOTEHOLDERS. The Issuer will furnish or cause to be furnished to the Trustee (a)
not more than five days after each Record Date a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders as of
such Record Date, (b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Issuer of any such request, a list of
similar form and content as of a date not more than 10 days prior to the time
such list is furnished; PROVIDED, HOWEVER, that so long as the Trustee is the
Note Registrar, no such list shall be required to be furnished. The Trustee or,
if the Trustee is not the Note Registrar, the Issuer shall furnish to the
Security Insurer in writing on an annual basis on each June 30 (beginning on
June 30, 1998) and at such other times as the Security Insurer may request a
copy of the list.
SECTION 7.2. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
NOTEHOLDERS. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders contained in the
most recent list furnished to the Trustee as provided in Section 7.1 and the
names and addresses of Holders received by the Trustee in its capacity as Note
Registrar. The Trustee may destroy any list furnished to it as provided in such
Section 7.1 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b)
with other Noteholders with respect to their rights under this Indenture or
under the Notes.
(c) The Issuer, the Trustee and the Note Registrar
shall have the protection of TIA Section 312(c).
SECTION 7.3. REPORTS BY ISSUER. (a) The Issuer shall:
(i) file with the Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Issuer may
be required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act;
(ii) file with the Trustee and the Commission in accordance
with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(iii) supply to the Trustee (and the Trustee shall transmit by
mail to all Noteholders described in TIA Section 313(c)) such summaries
of any information, documents and reports required to be filed by the
Issuer pursuant to clauses (i) and (ii) of this Section 7.3(a) as may
be required by rules and regulations prescribed from time to time by
the Commission.
(b) Unless the Issuer otherwise determines, the
fiscal year of the Issuer shall end on December 31 of each year.
SECTION 7.4. REPORTS BY TRUSTEE. If required by TIA Section 313(a),
within 60 days after each September 30, beginning with September 30, 1997, the
Trustee shall mail to each Noteholder as required by TIA Section 313(c) a brief
report dated as of such date that complies with TIA Section 313(a). The Trustee
also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to
Noteholders shall be filed by the Trustee with the Commission and each stock
exchange, if any, on which the Notes are listed. The Issuer shall notify the
Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1. COLLECTION OF MONEY. Except as otherwise expressly
provided herein, the Trustee may demand payment or delivery of, and shall
receive and collect, directly and without
intervention or assistance of any fiscal agent or other intermediary, all money
and other property payable to or receivable by the Trustee pursuant to this
Indenture. The Trustee shall apply all such money received by it as provided in
this Indenture. Except as otherwise expressly provided in this
Indenture, if any default occurs in the making of any payment
or performance under any agreement or instrument that is part
of the Trust Estate, the Trustee may take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
SECTION 8.2. TRUST ACCOUNTS. (a) On or prior to the
Closing Date, the Issuer shall cause the Servicer to establish
and maintain, in the name of the Trustee, for the benefit of the
Noteholders, the Certificateholders and the Security Insurer, the Trust
Accounts as provided in Section 5.1 of the Sale and Servicing Agreement.
(b) Subject to Section 5.6 of the Sale and Servicing
Agreement, on each Payment Date and Redemption Date, the Trustee
shall distribute all amounts on deposit in the Note Distribution Account to
Noteholders in respect of the Notes to the extent of amounts due and unpaid on
the Notes for principal and interest in the following amounts and in the
following order of priority (except as otherwise provided in Section 5.6):
(i) accrued and unpaid interest on the Notes; provided that
if there are not sufficient funds in the Note Distribution Account to
pay the entire amount of accrued and unpaid interest then due on each
class of Notes, the amount in the Note Distribution Account shall be
applied to the payment of such interest on each class of Notes pro rata
on the basis of the amount of accrued and unpaid interest due on each
class of Notes;
(ii) any amounts deposited in the Note Distribution Account
with respect to the Prepayment Amount shall be distributed sequentially
to the Holders of the Class A-1 Notes and the Class A-2 Notes, in that
order, such that the
Prepayment Amount will not be distributed to the Holders of a Class of
Notes until each Class of Notes having a lower numerical Class
designation has been paid in full;
(iii) principal (including, prior to the Parity Date, any
Accelerated Principal Distributable Amounts) to the Holders of the
Class A-1 Notes until the Outstanding Amount
of the Class A-1 Notes is reduced to zero; and
(iv) principal (including, prior to the Parity Date, any
Accelerated Principal Distributable Amounts not distributed in
accordance with clause (iii) above) to the Holders of the Class A-2
Notes until the Outstanding Amount
of the Class A-2 Notes is reduced to zero.
SECTION 8.3. GENERAL PROVISIONS REGARDING ACCOUNTS.
(a) So long as no Default or Event of Default shall have
occurred and be continuing, all or a portion of the funds in the
Trust Accounts shall be invested in Eligible Investments and reinvested by the
Trustee upon Issuer Order, subject to the provisions of Section 5.1(b) of the
Sale and Servicing Agreement. All income or other gain from investments of
moneys deposited in the Trust Accounts shall be deposited (or caused to be
deposited) by the Trustee in the Collection Account, and any loss resulting from
such investments shall be charged to such account. The Issuer will not direct
the Trustee to make any investment of any funds or to sell any investment held
in any of the Trust Accounts unless the security interest Granted and perfected
in such account will continue to be perfected in such investment or the proceeds
of such sale, in either case without any further action by any Person, and, in
connection with any direction to the Trustee to make any such investment or
sale, if requested by the Trustee, the Issuer shall deliver to the Trustee and
the Security Insurer an Opinion of Counsel, acceptable to the Trustee and the
Security Insurer, to such effect.
(b) [Reserved]
(c) Subject to Section 6.1(c), the Trustee shall not in any
way be held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Eligible Investment included therein except for
losses attributable to the Trustee's failure to make payments on such Eligible
Investments issued by the Trustee, in its commercial capacity as principal
obligor and not as trustee, in accordance with their terms.
(d) If (i) the Issuer shall have failed to give investment
directions for any funds on deposit in the Trust Accounts to the Trustee by
12:00 noon Eastern Time (or such other time as may be agreed by the Issuer and
Trustee) on any Business Day; or (ii) a Default or Event of Default shall have
occurred and be continuing with respect to the Notes but the Notes shall not
have been declared due and payable pursuant to Section 5.2, or, if such Notes
shall have been declared due and payable following an Event of Default, amounts
collected or receivable from the Trust Estate are being applied in accordance
with Section 5.5 as if there had not been such a declaration; then the Trustee
shall, to the fullest extent practicable, invest and reinvest funds in the Trust
Accounts in investments of the type set forth in clause (c) of the definition of
Eligible Investments.
SECTION 8.4. RELEASE OF TRUST ESTATE. (a) Subject to the payment of
its fees and expenses pursuant to Section 6.7, the Indenture Collateral Agent
may, and when required by the provisions of this Indenture shall, execute
instruments to release property from the, lien of this Indenture, or convey the
Indenture Collateral Agent's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the Indenture Collateral Agent
as provided in this Article, VIII shall be bound to ascertain the Indenture
Collateral Agent's authority, inquire into the satisfaction of any conditions
precedent or see to the application of any moneys.
(b) The Indenture Collateral Agent shall, at such time as
there are no Notes outstanding and all sums due the Trustee pursuant to Section
6.7 have been paid, release any remaining portion of the Trust Estate that
secured the Notes from the lien of this Indenture and release to the Issuer or
any other Person entitled thereto any funds then on deposit in the Trust
Accounts. The Trustee shall release property from the lien of this Indenture
pursuant to this Section 8.4(b) only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and (if required
by the TIA) Independent Certificates in accordance with TIA Sections 314(c) and
314(d)(1) meeting the applicable requirements of Section 11.1.
SECTION 8.5. OPINION OF COUNSEL. The Indenture Collateral Agent
shall receive at least seven days' notice when requested by the Issuer to take
any action pursuant to Section 8.4(a), accompanied by copies of any instruments
involved, and the Trustee shall also require as a condition to such action, an
Opinion of Counsel, in form and substance satisfactory to the Trustee, stating
the legal effect of any such action, outlining the steps required to complete
the same, and concluding that all
conditions precedent to the taking of such action have been complied with and
such action will not materially and adversely impair the security for the Notes
or the rights of the Noteholders in contravention of the provisions of this
Indenture; PROVIDED, HOWEVER, that such Opinion of Counsel shall not be required
to express an opinion as to the fair value of the Trust Estate. Counsel
rendering any such opinion may rely, without independent investigation, on the
accuracy and validity of any certificate or other instrument delivered to the
Trustee in connection with any such action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
NOTEHOLDERS. (a)Without the consent of the Holders of any
Notes but with the consent of the Security Insurer (unless an
Insurer Default shall have occurred and be continuing) and with
prior notice to the Rating Agencies by the Issuer, as evidenced
to the Trustee, the Issuer and the Trustee, when authorized by
an Issuer Order, at any time and from time to time, may enter
into one or more indentures supplemental hereto (which shall
conform to the provisions of the Trust Indenture Act as in
force at the date of the execution thereof), in form
satisfactory to the Trustee, for any of the following purposes:
(i) to correct or amplify the description of any
property at any time subject to the lien of this Indenture,
or better to assure, convey and confirm unto the Indenture
Collateral Agent any property subject or required to be
subjected to the lien of this Indenture, or to subject to
the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with
the applicable provisions hereof, of another person to the
Issuer, and the assumption by any such successor of the
covenants of the Issuer herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the
benefit of the Holders of the Notes, or to surrender any
right or power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge
any property to or with the Indenture Collateral Agent;
(v) to cure any ambiguity, to correct or supplement
any provision herein or in any supplemental indenture which
may be inconsistent with any other provision herein or in any
supplemental indenture or to make any other provisions with respect to
matters or questions arising under this Indenture or in any
supplemental indenture; PROVIDED that such action shall not adversely
affect the interests of the
Holders of the Notes;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect
to the Notes and to add to or change any of the provisions of this
Indenture as shall be necessary to facilitate the administration of the
trusts hereunder by more than one trustee, pursuant to the requirements
of Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or
under any similar federal statute hereafter enacted and to
add to this Indenture such other provisions as may be
expressly required by the TIA.
The Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the
Holders of the Notes but with the prior written consent of the Security Insurer
and prior notice to the Rating Agencies by the Issuer, as evidenced to the
Trustee, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture or of modifying in any manner the
rights of the Holders of the Notes under this Indenture; provided, however, that
such action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any Noteholder.
SECTION 9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS.
The Issuer and the Trustee, when authorized by an Issuer Order, also may, with
prior notice to the Rating Agencies, with the consent of the Security Insurer
(unless an Insurer Default shall have occurred and be continuing) and with the
consent of the Holders of not less than a majority of the outstanding Amount of
the Notes, by Act of such Holders delivered to the Issuer and the Trustee, enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; PROVIDED, HOWEVER, that, subject to
the express rights of the Security Insurer under the Basic Documents, no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:
(i) change the date of payment of any installment of
principal of or interest on any Note, or reduce the principal amount
thereof, the interest rate thereon or the Redemption Price with respect
thereto, change the provision
of this Indenture relating to the application of collections on, or
the proceeds of the sale of, the Trust Estate to payment of principal
of or interest on the Notes, or change any place of payment where, or
the coin or currency in which, any Note or the interest thereon is
payable;
(ii) impair the right to institute suit for the enforcement
of the provisions of this Indenture requiring the application of funds
available therefor, as provided in
Article V, to the payment of any such amount due on the Notes on or
after the respective due dates thereof (or, in the case of redemption,
on or after the Redemption Date);
(iii) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iv) modify or alter the provisions of the proviso to
the definition of the term "Outstanding";
(v) reduce the percentage of the Outstanding Amount of the
Notes required to direct the Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.4;
(vi) modify any provision of this Section except to
increase any percentage specified herein or to provide that
certain additional provisions of this Indenture or the Basic Documents
cannot be modified or waived without the consent of the Holder of each
Outstanding Note affected thereby;
(vii) modify any of the provisions of this Indenture in
such manner as to affect the calculation of the amount of
any payment of interest or principal due on any Note on any
Payment Date (including the calculation of any of the
individual components of such calculation) or to affect the
rights of the Holders of Notes to the benefit of any
provisions for the mandatory redemption of the Notes
contained herein; or
(viii) permit the creation of any lien ranking prior to
or on a parity with the lien of this Indenture with respect
to any part of the Trust Estate or, except as otherwise permitted or
contemplated herein or in any of the Basic Documents, terminate the
lien of this Indenture on any property at any time subject hereto or
deprive the Holder of any Note of the security provided by the lien of
this Indenture.
The Trustee may determine whether or not any Notes would be
affected by any supplemental indenture and any such determination shall be
conclusive upon the Holders of all Notes,
whether theretofore or thereafter authenticated and delivered hereunder. The
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Promptly after the execution by the Issuer and the Trustee of
any supplemental indenture pursuant to this Section, the Trustee shall mail to
the Holders of the Notes to which such
amendment or supplemental indenture relates a notice setting forth in general
terms the substance of such supplemental indenture. Any failure of the Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.3. EXECUTION OF SUPPLEMENTAL INDENTURES. In
executing, or permitting the additional trusts created by, any
supplemental indenture permitted by this Article IX or the
modifications thereby of the trusts created by this Indenture,
the Trustee shall be entitled to receive, and subject to
Sections 6.1 and 6.2, shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that affects the
Trustee's own rights, duties, liabilities or immunities under
this Indenture or otherwise.
SECTION 9.4. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the
execution of any supplemental indenture pursuant to the
provisions hereof, this Indenture shall be and be deemed to be
modified and amended in accordance therewith with respect to the
Notes affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the
Trustee, the Issuer and the Holders of the Notes shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
SECTION 9.5. CONFORMITY WITH TRUST INDENTURE ACT. Every amendment
of this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.6. REFERENCE IN NOTES TO SUPPLEMENTAL
INDENTURES. Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article
IX may, and if required by the Trustee shall, bear a notation in form approved
by the Trustee as to any matter provided for in such supplemental indenture. If
the Issuer or the Trustee shall so determine, new Notes so modified as to
conform, in the opinion of the Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Trustee in exchange for Outstanding Notes.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1. REDEMPTION. (a) The Notes are subject to redemption in
whole, but not in part, at the direction of the Seller pursuant to Section
9.1(a) of the Sale and Servicing Agreement, on any Payment Date on which the
Servicer exercises its option to purchase the Trust Estate pursuant to said
Section
9.1(a), for a purchase price equal to the Redemption Price; PROVIDED, HOWEVER,
that the Issuer has available funds sufficient to pay the Redemption Price. The
Servicer or the Issuer shall furnish the Security Insurer and the Rating
Agencies notice of such redemption. If the Notes are to be redeemed pursuant to
this Section 10.1(a), the Servicer or the Issuer shall furnish notice of such
election to the Trustee not later than 35 days prior to the Redemption Date and
the Issuer shall deposit with the Trustee in the Note Distribution Account the
Redemption Price of the Notes to be redeemed whereupon all such Notes shall be
due and payable on the Redemption Date upon the furnishing of a notice complying
with Section 10.2 to each Holder of Notes.
(b) If on the Payment Date on which the Funding Period ends
(or on the Payment Date on or immediately following the last day of the Funding
Period, if the Funding Period does not end on a Payment Date), any Pre-Funded
Amount remains on deposit in the Pre-Funding Account after giving effect to the
purchase of all Subsequent Receivables, including any such purchase on such
Redemption Date, the Notes will be redeemed in whole or in part, sequentially in
an aggregate principal amount equal to the Prepayment Amount which will be
distributed to Holders of the Class Notes having the lowest numerical
designation then outstanding until paid in full, and then to the Class of Notes
bearing the next lowest numerical designation then outstanding.
(c) In the event that the assets of the Trust are sold
pursuant to Section 9.2 of the Trust Agreement, all amounts on deposit in the
Note Distribution Account shall be paid to the Noteholders up to the Outstanding
Amount of the Notes and all accrued and unpaid interest thereon and the Security
Insurer shall receive all amounts then owing to it. If amounts are to be paid to
Noteholders pursuant to this Section 10.1(c), the Servicer or the Issuer shall,
to the extent practicable, furnish notice of such event to the Trustee and the
Security Insurer not later than 45 days prior to the Redemption Date whereupon
all such amounts shall be payable on the Redemption Date.
SECTION 10.2. FORM OF REDEMPTION NOTICE. (a) Notice of redemption
under Section 10.1(a) shall be given by the Trustee by facsimile or by
first-class mail, postage prepaid, transmitted or mailed prior to the applicable
Redemption Date to each Holder of Notes, as of the close of business on the
Record Date preceding the applicable Redemption Date, at such Holder's address
appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) that the Record Date otherwise applicable to such
Redemption Date is not applicable and that payments shall
be made only upon presentation and surrender of such Notes and the
place where such Notes are to be surrendered for payment of the
Redemption Price (which shall be the office or agency of the Issuer to
be maintained as provided in Section 3.2); and
(iv) that interest on the Notes shall cease to accrue
on the Redemption Date.
Notice of redemption of the Notes shall be given by the
Trustee in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair or
affect the validity of the redemption of any other Note.
(b) Prior notice of redemption under Sections 10.1(b)
is not required to be given to Noteholders.
SECTION 10.3. NOTES PAYABLE ON REDEMPTION DATE. The Notes to be
redeemed shall, following notice of redemption as required by Section 10.2 (in
the case of redemption pursuant to Section 10.1(a)), on the Redemption Date
become due and payable at the Redemption Price and (unless the Issuer shall
default in the payment of the Redemption Price) no interest shall accrue on
the Redemption Price for any period after the date to which accrued interest is
calculated for purposes of calculating the Redemption Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
(a) Upon any application or request by the Issuer to the
Trustee or the Indenture Collateral Agent to take any action
under any provision of this Indenture, the Issuer shall furnish
to the Trustee or the Indenture Collateral Agent, as the case
may be, and to the Security Insurer if the application or
request is made to the Indenture Collateral Agent (i) an
Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel
stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with and (iii) (if
required by the TIA) an Independent Certificate from a firm of
certified public accountants meeting the applicable
requirements of this Section, except that, in the case of any
such application or request as to which the furnishing of such
documents is specifically required by any provision of this
Indenture, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each
such signatory such condition or covenant has been
complied with.
(b) (i) Prior to the deposit of any Collateral or other
property or securities with the Indenture Collateral Agent that is to
be made the basis for the release of any property or securities subject
to the lien of this Indenture, the Issuer shall, in addition to any
obligation imposed in Section 11.1(a) or elsewhere in this Indenture,
furnish to the Indenture Collateral Agent and the Security Insurer an
Officer's Certificate certifying or stating the opinion of each person
signing such certificate as to the fair value (within 90 days of such
deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Collateral Agent and the Security Insurer an
Officer's Certificate certifying or stating the opinion of any signer
thereof as to the matters described in clause (i) above, the Issuer
shall also deliver to the Indenture Collateral Agent and the Security
Insurer an Independent Certificate as to the same matters, if the fair
value to the Issuer of the securities to be so deposited and of all
other such securities made the basis of any such withdrawal or release
since the commencement of the then-current fiscal year of the Issuer,
as set forth in the certificates delivered pursuant to clause (i) above
and this clause (ii), is 10% or more of the Outstanding Amount of the
Notes, but such a certificate need not be furnished with respect to any
securities so deposited, if the fair value thereof to the Issuer as set
forth in the related Officer's Certificate is less than $25,000 or less
than 1% percent of the Outstanding Amount of the Notes.
(iii) Other than with respect to the release of any Purchased
Receivables or Liquidated Receivables, whenever any property or
securities are to be released from the lien
of this Indenture, the Issuer shall also furnish to the Indenture
Collateral Agent and the Security Insurer an Officer's Certificate
certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such release) of
the property or securities proposed to be released and stating that in
the opinion of such person the proposed release will not impair
the security under this Indenture in contravention of the
provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Trustee and the Security Insurer an Officer's Certificate
certifying or stating the opinion of any signer thereof as to the
matters described in clause (iii) above, the Issuer shall also furnish
to the Indenture Collateral Agent and the Security Insurer an
Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property other than Purchased
Receivables and Defaulted Receivables, or securities released from the
lien of this Indenture since the commencement of the then current
calendar year, as set forth in the certificates required by clause
(iii) above and this clause (iv), equals 10% or more of the Outstanding
Amount of the Notes, but such certificate need not be furnished in the
case of any release of property or securities if the fair value thereof
as set forth in the related Officer's Certificate is less than $25,000
or less than 1% percent of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.9 or any other provision of
this Section, the Issuer may (A) collect, liquidate, sell or otherwise
dispose of Receivables as and to the extent permitted or required by
the Basic Documents and (B) make cash payments out of the Trust
Accounts as and to the extent permitted or required by the Basic
Documents.
SECTION 11.2. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In
any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by
the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an Authorized Officer of
the Issuer may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his or her certificate or opinion is based are erroneous. Any such
certificate of an Authorized Officer or Opinion of Counsel may be based, insofar
as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Servicer, the Seller or the
Issuer, stating that the information with respect to such factual matters is in
the possession of the Servicer, the Seller or the Issuer, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Whenever in this Indenture, in connection with any application
or certificate or report to the Trustee, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of
the Issuer's compliance with any term hereof, it is intended that the truth and
accuracy, at the time of the granting of such application or at the effective
date of such certificate or report (as the case may be), of the facts and
opinions stated in such document shall in such case be conditions precedent to
the right of the Issuer to have such application granted or to the sufficiency
of such certificate or report. The foregoing shall not, however, be construed to
affect the Trustee's right to rely upon the truth and accuracy of any statement
or opinion contained in any such document as provided in Article VI.
SECTION 11.3. ACTS OF NOTEHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Trustee, and, where it is hereby
expressly required, to the Issuer. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Noteholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any person
of any such instrument or writing may be proved in any customary
manner of the Trustee.
(c) The ownership of Notes shall be proved by the
Note Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Notes shall bind the Holder
of every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof,
in respect of anything done, omitted or suffered to be done by the Trustee or
the Issuer in reliance thereon, whether or not notation of such action is made
upon such Note.
SECTION 11.4. NOTICES, ETC., TO TRUSTEE, ISSUER AND
RATING AGENCIES. Any request, demand, authorization, direction,
notice, consent, waiver or Act of Noteholders or other documents provided or
permitted by this Indenture to be made upon, given or furnished to or filed
with:
(a) The Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if personally delivered, delivered by
overnight courier or mailed certified mail, return receipt requested and shall
be deemed to have been duly given upon receipt to the Trustee at its Corporate
Trust Office, or
(b) The Issuer by the Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if personally delivered, delivered by
overnight courier or mailed certified mail, return receipt requested and shall
be deemed to have been duly given upon receipt to the Issuer addressed to: The
Money Store Auto Trust 1997-2, in care of Bankers Trust (Delaware) 1001
Jefferson Street, Suite 550, Wilmington, Delaware 19801 Attention: Lisa Wilkins,
with a copy to Bankers Trust Company, 4 Albany Street, New York, New York 10006,
Attention: Corporate Trust Agency, or at any other address previously furnished
in writing to the Trustee by Issuer. The Issuer shall promptly transmit any
notice received by it from the Noteholders to the Trustee.
(c) The Security Insurer by the Issuer or the Trustee
shall be sufficient for any purpose hereunder if in writing and
mailed by registered mail or personally delivered or telexed or
telecopied to the recipient as follows: to the Security
Insurer: MBIA Insurance Corporation, 113 King Street, Armonk,
NY 10504, Attention: Insured Portfolio Management - SF, Fax:
914-765-3810, Ph: (914) 273-4545.
Notices required to be given to the Rating Agencies by
the Issuer, the Trustee or the Owner Trustee shall be in
writing, personally delivered, delivered by overnight courier or mailed
certified mail, return receipt requested to (i) in the case of Moody's, at the
following address: Moody's Investors Service, Inc., 99 Church Street, New York,
New York 10004 and (ii) in the case of S&P, at the following address: Standard &
Poor's Ratings Services, 26 Broadway (15th Floor), New York, New York 10004,
Attention of Asset Backed Surveillance Department; or as to each of the
foregoing, at such other address as shall be designated by written notice to the
other parties.
SECTION 11.5. NOTICES TO NOTEHOLDERS; WAIVER. Where this
Indenture provides for notice to Noteholders of any event, such
notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class,
postage prepaid to each Noteholder affected by such event, at
his address as it appears on the Note Register, not later than
the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case where
notice to Noteholders is given by mail, neither the failure to
mail such notice nor any defect in any notice so mailed to any
particular Noteholder shall affect the sufficiency of such
notice with respect to other Noteholders, and any notice that
is mailed in the manner here in provided shall conclusively be
presumed to have been duly given.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the Trustee
but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to
Noteholders when such notice is required to be given pursuant to any provision
of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.
Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any
other rights or obligations created hereunder, and shall not under any
circumstance constitute a Default or Event of Default.
SECTION 11.6. ALTERNATE PAYMENT AND NOTICE PROVISIONS.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Trustee or any Paying Agent
to such Holder, that is different from the methods provided for in this
Indenture for such payments or notices, provided that such methods are
reasonable and consented to by the Trustee (which consent shall not be
unreasonably withheld). The Issuer will furnish to the Trustee a copy of each
such agreement and the Trustee will cause
payments to be made and notices to be given in accordance with
such agreements.
SECTION 11.7. CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose
duties on any person (including the provisions automatically deemed included
herein unless expressly excluded by this Indenture) are a part of and govern
this Indenture, whether or not physically contained herein.
SECTION 11.8. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.9. SUCCESSORS AND ASSIGNS. All covenants and agreements
in this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Trustee in this
Indenture shall bind its successors. All agreements of the Indenture Collateral
Agent in this Indenture shall bind its successors.
SECTION 11.10. SEPARABILITY. In case any provision in
this Indenture or in the Notes shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 11.11. BENEFITS OF INDENTURE. The Security Insurer and its
successors and assigns shall be a third-party beneficiary to the provisions of
this Indenture, and shall be entitled to rely upon and directly to enforce such
provisions of
this Indenture so long as no Insurer Default shall have occurred and be
continuing. Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, and the
Noteholders, and any other party secured hereunder, and any other person with
an Ownership interest in any part of the Trust Estate, any benefit or any legal
or equitable right, remedy or claim under this Indenture. The Security Insurer
may disclaim any of its rights and powers under this Indenture (in which case
the Indenture Trustee may exercise such right or power hereunder), but not its
duties and obligations under the Note Policy, upon delivery of a written notice
to the Trustee.
SECTION 11.12. LEGAL HOLIDAYS. In any case where the date on which
any payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date an which nominally due, and no interest shall
accrue for the period from and after any such
nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14. COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. RECORDING OF INDENTURE. If this Indenture is subject
to recording in any appropriate public recording offices, such recording is to
be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Trustee or any other counsel reasonably
acceptable to the Trustee and the Security Insurer) to the effect that such
recording is necessary either for the protection of the Noteholders or any other
person secured hereunder or for the enforcement of any right or remedy granted
to the Trustee or the Indenture Collateral Agent under this Indenture.
SECTION 11.16. TRUST OBLIGATION. No recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Seller, the
Servicer, the General Partner, the Owner Trustee, the Trustee or the Indenture
Collateral Agent on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Seller, the Servicer, the General Partner, the Trustee, the Indenture Collateral
Agent or the Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director, employee or agent of the Seller, the Servicer, the
General Partner, the Trustee, the Indenture Collateral Agent or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Seller, the Servicer, the General Partner, the Owner Trustee, the
Indenture Collateral Agent or the Trustee or of any successor or assign of the
Seller, the Servicer, the General Partner, the Trustee, the Indenture Collateral
Agent or the Owner Trustee in its individual capacity, except as any such Person
may have expressly agreed (it being understood that the Trustee, the Indenture
Collateral Agent and the Owner Trustee have no such obligations in their
individual capacity) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
SECTION 11.17. NO PETITION. The Trustee and the Indenture Collateral
Agent, by entering into this Indenture, and each Noteholder, by accepting a
Note, hereby covenant and agree that they will not at any time institute against
the Seller, the General Partner, or the Issuer, or join in any institution
against the Seller, the General Partner, or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the Basic Documents.
SECTION 11.18. INSPECTION. The Issuer agrees that, on reasonable
prior notice, it will permit any representative of the Trustee or of the
Security Insurer, during the Issuer's normal business hours, to examine all the
books of account, records, reports, and other papers of the Issuer, to make
copies and extracts therefrom, to cause such books to be audited by Independent
certified public accountants, and to discuss the Issuer's affairs, finances and
accounts with the Issuer's officers, employees, and independent certified public
accountants, all at such reasonable times and as often as may be
reasonably requested. The Trustee shall and shall cause its
representatives to hold in confidence all such information
except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except
to the extent that the Trustee may reasonably determine that such disclosure is
consistent with its Obligations hereunder.
[THIS SPACE LEFT INTENTIONALLY BLANK]
<PAGE>
IN WITNESS WHEREOF, the Issuer and the Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
THE MONEY STORE AUTO TRUST 1997-2,
By: BANKERS TRUST (DELAWARE), not in
its individual capacity but solely
as Owner Trustee,
By:_____________________________
Name:
Title:
THE CHASE MANHATTAN BANK, not in its
individual capacity but solely as
Trustee and Indenture Collateral Agent,
By:_____________________________
Name:
Title:
<PAGE>
[Form of Note] EXHIBIT D-1
REGISTERED $_____________
No. R
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.
[Unless this Note is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration
of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS
AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THE MONEY STORE AUTO TRUST 1997-2
CLASS A-1 6.17% ASSET BACKED NOTES
The Money Store Auto Trust 1997-2, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby
promises to pay to CEDE & CO., or registered assigns, the
principal sum of [ ] DOLLARS payable on each Payment Date in an amount equal to
the result obtained by multiplying (i) a fraction the numerator of which is
$[INSERT INITIAL PRINCIPAL AMOUNT OF NOTE] and the denominator of which is
$160,000,000 by (ii) the aggregate amount, if any, payable from the Note
Distribution Account in respect of principal on the Class A-1 Notes pursuant to
Section 3.1 of the Indenture, provided, however, that the entire unpaid
principal amount of this Note shall be due and payable on March 2001 Payment
Date (the "Class A-1 Final Scheduled Payment Date". The Issuer will pay interest
on this Note at the rate per annum shown above on each Payment Date until the
principal of this Note is paid or made available for payment, on the principal
amount of this Note outstanding on the preceding Payment Date (after giving
effect to all payments of principal made on the preceding Payment Date).
Interest on this Note will accrue for each Payment Date from the most recent
Payment Date on which interest has been paid to but excluding such Payment Date
or, if no interest has yet been paid, from June 20, 1997. Interest will be
computed on the basis of a 360-day year consisting of twelve 30-day months. Such
principal of and interest on this Note shall be paid in the manner specified on
the reverse hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be applied first to
interest due and payable on this Note as provided above and then to the unpaid
principal of this Note.
The Notes are entitled to the benefits of a note guaranty
insurance policy (the "Note Policy") issued by MBIA Insurance Corporation (the
"Security Insurer"), pursuant to which the Security Insurer has unconditionally
guaranteed payments of Note Insured Payments on each Payment Date, all as
more fully set forth in the Indenture.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its Authorized Officer as of the date
set forth below.
THE MONEY STORE AUTO TRUST 1997-2
By: BANKERS TRUST (DELAWARE),
not in its individual capacity
but solely as Owner Trustee under
the Trust Agreement,
By: __________________________
Name:
Title:
Date:
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in
the within-mentioned Indenture.
Date:
THE CHASE MANHATTAN BANK, not in
its individual capacity but solely
as Trustee,
by______________________
Authorized Signatory
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A-1 6.17% Asset Backed Notes (herein called the
"Class A-1 Notes"), all issued under an Indenture dated as of May 31, 1997 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and The Chase Manhattan Bank, as trustee (the
"Trustee", which term includes any successor Trustee under the Indenture, and
the "Indenture Collateral Agent", which term includes any successor Indenture
Collateral Agent under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.
The Class A-1 Notes and the Class A-2 Notes (together, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the
Indenture.
Principal of the Class A-1 Notes will be payable on each
Payment Date in an amount described on the face hereof. "Payment Date" means the
twentieth day of each month, or, if any
such date is not a Business Day, the next succeeding Business Day, commencing
in July 1997.
As described above, the entire unpaid principal amount of this
Note shall be due and payable on the earlier of the
Class A-1 Final Scheduled Payment Date and the Redemption Date, if any, pursuant
to Section 10.1(a) or 10.1(c) of the Indenture. As described above, a portion of
the unpaid principal balance of this Note shall be due and payable on the
Redemption Date, if any, pursuant to Section 10.1(b) of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable (i) on the date on which an Event of Default shall have
occurred and be continuing so long as an Insurer Default shall not have occurred
and be continuing or (ii) if an Insurer Default shall have occurred and be
continuing, on the date on which an Event of Default shall have occurred and be
continuing and the Trustee or the Holders of the Notes representing at least
66-2/3% of the Outstanding Amount of the Notes have declared the Notes to be
immediately due and payable in the manner provided in Section 5.2 of the
Indenture. All principal payments on the Class A-1 Notes shall be made pro rata
to the Class A-1 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Note, shall be made by check mailed to the Person
whose name appears as the
Holder of this Note (or one or more Predecessor Notes) on the Note Register as
of the close of business on each Record Date, except that with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for notation of
payment. Any reduction in the principal amount of this Note (or any one or more
Predecessor Notes) effected by any payments made on any Payment Date shall be
binding upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Payment Date, then the Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Holder hereof as of the Record
Date preceding such Payment Date by notice mailed prior to such Payment Date and
the amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Trustee's principal Corporate Trust Office or at
the office of the Trustee's agent appointed for such purposes located in The
City of New York.
The Issuer shall pay interest on overdue installments of
interest at the Class A-1 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed (a)
pursuant to Section 10.1(a) of the Indenture, in whole, but not in part, at the
option of the Servicer (with the consent of the Security Insurer under certain
circumstances), on any Payment Date on or after the date on which the Pool
Balance is less than or equal to 10% of the Original Pool Balance, and (b)
pursuant to Section 10.1(b) of the Indenture, in whole or in part, on the
Payment Date on or immediately following the last day of the Funding Period in
the event that any Pre-Funded Amount remains on deposit in the Pre-Funding
Account after giving effect to the purchase of all Subsequent Receivables,
including any such purchase on such Redemption Date.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, (i)
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or his attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar which
requirements include membership or participation in Securities Transfer Agents
Medallion Program ("Stamp") or such other "signature guarantee program" as may
be determined by the Note Registrar in addition to, or in substitution for,
Stamp, all in accordance with the Exchange Act, and (ii) accompanied by such
other documents as the Trustee may require, and thereupon one or more new Notes
of
authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note
or, in the case of a Note Owner, a beneficial interest in a
Note covenants and agrees that no recourse may be taken, directly or indirectly,
with respect to the obligations of the Issuer, the Owner Trustee, the Indenture
Collateral Agent or the Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
Seller, the Servicer, the General Partner, the Trustee, the Indenture Collateral
Agent or the Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Seller, the Servicer, the General
Partner, the Trustee, the Indenture Collateral Agent or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Seller, the Servicer, the General Partner, the Owner Trustee or the Trustee or
of any successor or assign of the Seller, the Servicer, the General Partner, the
Trustee, the Indenture Collateral Agent or the Owner Trustee in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that the Trustee, the Indenture Collateral Agent and the Owner
Trustee have no such obligations in their individual capacity) and except that
any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note
or, in the case of a Note Owner, a beneficial interest in a
Note covenants and agrees that by accepting the benefits of the Indenture that
such Noteholder will not at any time institute
against the Depositor, the General Partner, or the Issuer or join in any
institution against the Depositor, the General Partner, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings, under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the Basic Documents.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Trustee and the Security Insurer and any agent of the
Issuer, the Trustee or the Security
Insurer may treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Issuer, the Trustee nor any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Security Insurer and
of the Holders of Notes representing a majority of the Outstanding Amount of all
Notes at the time Outstanding. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times,
place, and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Indenture or the Basic Documents, neither Bankers
Trust (Delaware) in its individual capacity, any owner of a beneficial interest
in the Issuer, nor any of their respective partners, beneficiaries, agents,
officers, directors, employees or successors or assigns shall be personally
liable for, nor shall recourse be had to any of them for, the payment of
principal of or interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in this Note or the
Indenture, it being expressly understood that said covenants, obligations and
indemnifications have been made by the Owner Trustee for the sole purposes of
binding the interests of the Owner Trustee in the assets of the Issuer. The
Holder of this Note by the acceptance hereof agrees that except as expressly
provided in the Indenture or the Basic Documents, in the case of an Event of
Default under the Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; PROVIDED, HOWEVER, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto _______________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _____________, attorney, to transfer said Note on the books kept
for registration thereof, with full power of substitution in the premises.
Dated: ___________ _______________________
Guaranteed:
________________________
<PAGE>
REGISTERED [Form of Note] Exhibit D-2
$----------
No. R-_
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.
[Unless this Note is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration
of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS
AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THE MONEY STORE AUTO OWNER TRUST 1997-2
CLASS A-2 6.495% ASSET BACKED NOTES
The Money Store Auto Owner Trust 1997-2, a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of [_______________] DOLLARS payable on
each Payment Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $[INSERT INITIAL PRINCIPAL AMOUNT OF NOTE]
and the denominator of which is $60,500,000 by (ii) the aggregate amount, if
any, payable from the Note Distribution Account in respect of principal on the
Class A-2 Notes pursuant to Section 3.1 of the Indenture; PROVIDED, HOWEVER,
that the entire unpaid principal amount of this Note shall be due and payable on
the September 2003 Payment Date (the "Class A-2 Final Scheduled Payment Date").
The Issuer will pay interest on this Note at the rate per annum shown above on
each Payment Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Payment Date (after giving effect to all payments of principal made on the
preceding Payment Date). Interest on this Note will accrue for each Payment Date
from the most recent Payment Date on which interest has been paid to but
excluding such Payment Date or, if no interest has yet been paid, from June 20,
1997. Interest will be computed on the basis of a 360-day year consisting of
twelve 30-day months. Such principal of and interest on this Note shall be paid
in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be applied first to
interest due and payable on this Note as provided above and then to the unpaid
principal of this Note.
The Notes are entitled to the benefits of a note guaranty
insurance policy (the "Note Policy") issued by MBIA Insurance Corporation(the
"Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payments of Note Insured Payments on each Payment Date, all as more fully set
forth in the Indenture.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its Authorized Officer as of the date
set forth below.
THE MONEY STORE AUTO OWNER
TRUST 1997-2
By: BANKERS TRUST (DELAWARE), not in
its individual capacity but solely
as Owner Trustee under the
Trust Agreement,
By:__________________________
Name:
Title:
Date:
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in
the within-mentioned Indenture.
Date:
THE CHASE MANHATTAN BANK, not in
its individual capacity but solely
as Trustee,
By:______________________
Authorized Signatory
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A-2 6.495% Asset Backed Notes (herein called the
"Class A-2 Notes"), all issued under an Indenture dated as of May 31, 1997 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and The Chase Manhattan Bank, as trustee (the
"Trustee", which term includes any successor Trustee under the Indenture, and
the "Indenture Collateral Agent", which term includes any successor Indenture
Collateral Agent under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.
The Class A-2 Notes and the Class A-1 Notes (together, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the
Indenture.
Principal of the Class A-2 Notes will be payable on each
Payment Date in an amount described on the face hereof. "Payment Date" means the
twentieth day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing in July 1997.
As described above, the entire unpaid principal amount of this
Note shall be due and payable on the earlier of the
Class A-2 Final Scheduled Payment Date and the Redemption Date, if any, pursuant
to Section 10.1(a) or 10.1(c) of the Indenture. As described above, a portion of
the unpaid principal balance of this Note shall be due and payable on the
Redemption Date, if any, pursuant to Section 10.1(b) of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable (i) on the date on which an Event of Default shall have
occurred and be continuing so long as an Insurer Default shall not have occurred
and be continuing or (ii) if an Insurer Default shall have occurred and be
continuing, on the date on which an Event of Default shall have occurred and be
continuing and the Trustee or the Holders of the Notes representing at least
66-2/3% of the Outstanding Amount of the Notes have declared the Notes to be
immediately due and payable in the manner provided in Section 5.2 of the
Indenture. All principal payments on the Class A-2 Notes shall be made pro rata
to the Class A-2 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Note, shall be made by check mailed to the Person
whose name appears as the
Holder of this Note (or one or more Predecessor Notes) on the Note Register as
of the close of business on each Record Date, except that with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for notation of
payment. Any reduction in the principal amount of this Note (or any one or more
Predecessor Notes) effected by any payments made on any Payment Date shall be
binding upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Payment Date, then the Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Holder hereof as of the Record
Date preceding such Payment Date by notice mailed prior to such Payment Date and
the amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Trustee's principal Corporate Trust Office or at
the office of the Trustee's agent appointed for such purposes located in The
City of New York.
The Issuer shall pay interest on overdue installments of
interest at the Class A-2 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed (a)
pursuant to Section 10.1(a) of the Indenture, in whole, but not in part, at the
option of the Servicer (with the consent of the Insurer under certain
circumstances), on any Payment Date on or after the date on which the Pool
Balance is less than or equal to 10% of the Original Pool Balance, and (b)
pursuant to Section 10.1(b) of the Indenture, in whole or in part, on the
Payment Date on or immediately following the last day of the Funding Period in
the event that any Pre-Funded Amount remains on deposit in the Pre-Funding
Account after giving effect to the purchase of all Subsequent Receivables,
including any such purchase on such Redemption Date.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, (i)
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or his attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar which
requirements include membership or participation in Securities Transfer Agents
Medallion Program ("Stamp") or such other "signature guarantee program" as may
be determined by the Note Registrar in addition to, or in substitution for,
Stamp, all in accordance with the Exchange Act, and (ii) accompanied by such
other documents as the Trustee may require, and thereupon one or more new Notes
of
authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note
or, in the case of a Note Owner, a beneficial interest in a
Note covenants and agrees that no recourse may be taken, directly or indirectly,
with respect to the obligations of the Issuer, the Owner Trustee, the Indenture
Collateral Agent or the Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
Seller, the Servicer, the General Partner, the Trustee, the Indenture Collateral
Agent or the Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Seller, the Servicer, the General
Partner, the Trustee, the Indenture Collateral Agent or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Seller, the Servicer, the General Partner, the Owner Trustee, the Indenture
Collateral Agent or the Trustee or of any successor or assign of the Seller, the
Servicer, the General Partner, the Trustee, the Indenture Collateral Agent or
the Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Trustee, the Indenture Collateral
Agent and the Owner Trustee have no such obligations in their individual
capacity) and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note
or, in the case of a Note Owner, a beneficial interest in a
Note covenants and agrees that by accepting the benefits of the Indenture that
such Noteholder will not at any time institute
against the Depositor, the General Partner, or the Issuer or join in any
institution against the Depositor, the General Partner, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings, under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the Basic Documents.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Trustee and the Insurer and any agent of the Issuer,
the Trustee or the Insurer may treat the Person in whose name this Note (as of
the day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and neither the Issuer, the Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Insurer and of the
Holders of Notes representing a majority of the Outstanding Amount of all Notes
at the time Outstanding. The Indenture also contains provisions permitting the
Holders of Notes representing specified percentages of the Outstanding Amount of
the Notes, on behalf of the Holders of all the Notes, to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note (or any one of more Predecessor Notes) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note. The Indenture also permits the Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Trustee and
the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times,
place, and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Indenture or the Basic Documents, neither Bankers
Trust (Delaware) in its individual capacity, any owner of a beneficial interest
in the Issuer, nor any of their respective partners, beneficiaries, agents,
officers, directors, employees or successors or assigns shall be personally
liable for, nor shall recourse be had to any of them for, the payment of
principal of or interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in this Note or the
Indenture, it being expressly understood that said covenants, obligations and
indemnifications have been made by the Owner Trustee for the sole purposes of
binding the interests of the Owner Trustee in the assets of the Issuer. The
Holder of this Note by the acceptance hereof agrees that except as expressly
provided in the Indenture or the Basic Documents, in the case of an Event of
Default under the Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; PROVIDED, HOWEVER, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto _______________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _____________, attorney, to transfer said Note on the books kept
for registration thereof, with full power of substitution in the premises.
Dated: ___________ _______________________1
Signature Guaranteed:
_______________________
- --------
1 NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
TRUST AGREEMENT
between
TMS AUTO HOLDINGS, INC.
and
BANKERS TRUST (DELAWARE)
Owner Trustee
Dated as of May 31, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I Definitions................................................. 1
Section 1.1. Capitalized Terms......................................... 1
Section 1.2. Other Definitional Provisions............................. 4
ARTICLE II Organization............................................... 5
Section 2.1. Name .................................................. 5
Section 2.2. Office.................................................... 5
Section 2.3. Purposes and Powers....................................... 6
Section 2.4. Appointment of Owner Trustee.............................. 6
Section 2.5. Initial Capital Contribution of
Trust Estate............................................ 7
Section 2.6. Declaration of Trust...................................... 7
Section 2.7. Liability of Depositor as General
Partner ................................................ 7
Section 2.8. Title to Trust Property................................... 8
Section 2.9. Situs of Trust............................................ 8
Section 2.10.Representations and Warranties
of the Depositor........................................ 8
Section 2.11.Federal Income Tax Allocations............................ 10
Section 2.12.Covenants of the General Partner.......................... 11
Section 2.13.Covenants of the Owners................................... 13
ARTICLE III Trust Certificates and Transfer of
Interests................................................. 14
Section 3.1. Initial Ownership......................................... 14
Section 3.2. The Trust Certificates.................................... 14
Section 3.3. Authentication of Trust Certificates...................... 15
Section 3.4. Registration of Transfer and
Exchange of Trust Certificates.......................... 16
Section 3.5. Mutilated, Destroyed, Lost or
Stolen Trust Certificates............................... 16
Section 3.6. Persons Deemed Certificateholders......................... 16
Section 3.7. Access to List of Certificate-
holders' Names and Addresses............................ 16
Section 3.8. Maintenance of Office or Agency........................... 17
Section 3.9. Appointment of Certificate Paying Agent................... 17
Section 3.10.[Reserved]................................................ 18
Section 3.11.[Reserved]................................................ 18
Section 3.12.Disposition by the General Partner........................ 18
Section 3.13.ERISA Restrictions........................................ 18
Section 3.14.Book-Entry Trust Certificates............................. 19
Section 3.15.Notices to Clearing Agency................................ 20
Section 3.16.Definitive Trust Certificates............................. 20
ARTICLE IV Actions by Owner Trustee.................................. 21
Section 4.1. Prior Notice to Owners
with Respect to Certain Matters......................... 21
Section 4.2. Action by Certificateholders with
Respect to Certain Matters.............................. 21
Section 4.3. Action by Certificateholders with
Respect to Bankruptcy................................... 22
Section 4.4. Restrictions on Certificateholders'
Power................................................... 22
Section 4.5. Majority Control.......................................... 23
Section 4.6. Rights of Security Insurer................................ 23
ARTICLE V Application of Trust Funds:
Certain Duties............................................ 24
Section 5.1. Establishment of Certificate Distribution
Account................................................. 24
Section 5.2. Application of Funds in
Certificate Distribution Account........................ 24
Section 5.3. [Reserved]................................................ 27
Section 5.4. Method of Payment......................................... 27
Section 5.5. No Segregation of Monies; No
Interest................................................ 27
Section 5.6. Accounting and Reports to the
Noteholders, Certificateholders,
the Internal Revenue Service and
Others.................................................. 27
Section 5.7. Signature on Returns; Tax
Matters Partner......................................... 28
ARTICLE VI Authority and Duties of Owner
Trustee................................................... 28
Section 6.1. General Authority......................................... 28
Section 6.2. General Duties............................................ 29
Section 6.3. Action upon Instruction................................... 29
Section 6.4. No Duties Except as Specified in
this Agreement or in Instructions....................... 30
Section 6.5. No Action Except under Specified
Documents or Instructions............................... 31
Section 6.6. Restrictions.............................................. 31
ARTICLE VII Concerning the Owner Trustee.............................. 31
Section 7.1. Acceptance of Trusts and Duties........................... 31
Section 7.2. Furnishing of Documents................................... 33
Section 7.3. Representations and Warranties............................ 33
Section 7.4. Reliance; Advice of Counsel............................... 34
Section 7.5. Not Acting in Individual Capacity......................... 34
Section 7.6. Owner Trustee Not Liable for
Trust Certificates or
Receivables............................................. 34
Section 7.7. Owner Trustee May Own Trust
Certificates and Notes.................................. 35
Section 7.8. Payments from Owner Trust Estate.......................... 35
Section 7.9. Doing Business in Other Jurisdictions..................... 35
ARTICLE VIII Compensation of Owner Trustee............................ 36
Section 8.1. Owner Trustee's Fees and Expenses......................... 36
Section 8.2. Indemnification........................................... 36
Section 8.3. Payments to the Owner Trustee............................. 37
Section 8.4. Non-recourse Obligations.................................. 37
ARTICLE IX Termination of Trust Agreement............................. 37
Section 9.1. Termination of Trust Agreement............................ 37
Section 9.2. Dissolution upon Bankruptcy of the
General Partner ........................................ 39
ARTICLE X Successor Owner Trustees and Additional
Owner Trustees............................................ 40
Section 10.1.Eligibility Requirements for Owner
Trustee................................................. 40
Section 10.2.Resignation or Removal of Owner
Trustee................................................. 40
Section 10.3.Successor Owner Trustee................................... 41
Section 10.4.Merger or Consolidation of Owner
Trustee................................................. 42
Section 10.5.Appointment of Co-Trustee or
Separate Trustee........................................ 42
ARTICLE XI Miscellaneous.............................................. 44
Section 11.1. Supplements and Amendments............................... 44
Section 11.2. No Legal Title to Owner Trust
Estate in Certificateholders........................... 45
Section 11.3. Limitations on Rights of Others.......................... 46
Section 11.4. Notices.................................................. 46
Section 11.5. Severability............................................. 46
Section 11.6. Separate Counterparts.................................... 46
Section 11.7. Third-Party Beneficiaries................................ 47
Section 11.8. [Reserved]............................................... 47
Section 11.9. No Petition.............................................. 47
Section 11.10.No Recourse.............................................. 47
Section 11.11.Headings................................................. 47
Section 11.12.GOVERNING LAW............................................ 48
Section 11.13.[Reserved]............................................... 48
Section 11.14.Servicer................................................. 48
<PAGE>
EXHIBITS
Exhibit A Form of Trust Certificate
Exhibit B Form of Certificate of Trust
Exhibit C Form of Certificate Depository Agreement
<PAGE>
TRUST AGREEMENT dated as of May 31,
1997 between TMS AUTO HOLDINGS, INC., a
Delaware corporation, and Bankers Trust
(Delaware), a Delaware banking corporation
as Owner Trustee.
ARTICLE I
DEFINITIONS
SECTION 1.1. CAPITALIZED TERMS. For all purposes of this Agreement,
the following terms shall have the meanings set forth below:
"Agreement" shall mean this Trust Agreement, as the same may be
amended and supplemented from time to time.
"Basic Documents" shall mean this Agreement, the Sale and Servicing
Agreement, the Indenture, the Insurance Agreement, the Indemnification
Agreement, the Certificate Depository Agreement, the Note Depository Agreement
and the other documents and certificates delivered in connection therewith.
"Benefit Plan" shall have the meaning assigned to such term in Section
3.13.
"Book Entry Trust Certificates" means a beneficial interest in the
Trust Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 3.14.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 DEL. CODE ss. 3801 ET SEQ., as the same may be amended from
time to time.
"Certificate" means a Trust Certificate evidencing the beneficial
interest of a Certificateholder in the Trust, substantially in the form of
Exhibit A attached hereto.
"Certificate Depository Agreement" shall mean the agreement among the
Trust, the Owner Trustee, the Servicer and The Depository Trust Company, as the
initial Clearing Agency, dated as of the Closing Date, relating to the Trust
Certificates, substantially in the form attached hereto as Exhibit C, as the
same may be amended and supplemented from time to time.
"Certificate Distribution Account" shall have the meaning assigned to
such term in Section 5.1.
"Certificate of Trust" shall mean the Certificate of Trust in the form
of Exhibit B to be filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
"Certificate Paying Agent" shall mean any paying agent or co-paying
agent appointed pursuant to Section 3.9 and shall initially be the Bankers Trust
Company.
"Certificate Register" and "Certificate Registrar" shall mean the
register mentioned and the registrar appointed pursuant to Section 3.4.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"Corporate Trust Office" shall mean, with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
1001 Jefferson Street, Suite 550, Wilmington, Delaware 19801, with a copy of all
notices and other documents to be also furnished to Bankers Trust Company, 4
Albany Street, New York, New York 10006, Attention: Corporate Trust and Agency
Group, Structured Finance, 16th floor, or at such other address as the Owner
Trustee may designate by notice to the Certificateholders and the Depositor, or
the principal corporate trust office of any successor Owner Trustee (the address
of which the successor owner trustee will notify the Certificateholders and the
Depositor).
"Definitive Trust Certificates" shall mean either or both (as the
context requires) of (i) Trust Certificates issued in certificated, fully
registered form as provided in Section 3.14 and (ii) Trust Certificates issued
in certificated, fully registered form as provided in Section 3.16.
"Demand Note" shall have the meaning assigned to such term in Section
2.10(g).
"Depositor" shall mean the Seller in its capacity as Depositor
hereunder.
"ERISA" shall have the meaning assigned to such term in Section 3.13.
"Expenses" shall have the meaning assigned to such term in Section
8.2.
"General Partner" initially, the Depositor, or the successor permitted
by the Agreement and approved in writing by the Security Insurer.
"Holder" or "Certificateholder" shall mean the Person in whose name a
Trust Certificate is registered on the Certificate Register.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.2.
"Minimum Net Worth" means at any time of determination, and with
respect to the General Partner, net worth equal to 10% of the Certificate
Balance. For the purpose of the determination of Minimum Net Worth: (i) the
Demand Note issued to the General Partner shall be valued at par, (ii) assets
subject to a lien shall be valued at zero, (iii) Certificates or any other
interests in any entity taxable as a partnership for federal income tax purposes
shall be valued at zero, (iv) investments shall be valued at their respective
purchase prices plus accrued interest, and (v) demand notes of The Money Store
Inc. issued as contributions to the General Partner in connection with its
status as a general partner of any other partnership formed pursuant to trust
agreements substantially similar to this Agreement shall be valued at an amount
equal to the excess, if any, of (a) the aggregate current amount of all such
demand notes over (b) 10% of the aggregate Certificate Balance (as such terms
are defined in the related trust agreement) of all certificates issued by such
partnerships, as of such date of determination.
"Note Depository Agreement" shall mean the agreement among the Trust,
the Servicer and The Depository Trust Company, as the initial Clearing Agency,
dated as of the Closing Date, relating to the Notes, as the same may be amended
or supplemented from time to time.
"Owner" shall mean each Person who is the beneficial owner of a Book
Entry Certificate as reflected in the records of the Clearing Agency or if a
Clearing Agency Participant is not the Owner, then as reflected in records of a
Person maintaining an account with such Clearing Agency (directly or indirectly,
in accordance with the rules of such Clearing Agency).
"Owner Trust Estate" shall mean all right, title and interest of the
Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing Agreement, all funds on deposit from time
to time in the Trust Accounts and the Certificate Distribution Account and all
other property of the Trust from time to time, including any rights of the Owner
Trustee and the Trust pursuant to the Sale and Servicing Agreement.
"Owner Trustee" shall mean Bankers Trust (Delaware), a Delaware
banking corporation, not in its individual capacity but solely as owner trustee
under this Agreement, and any successor Owner Trustee hereunder.
"Record Date" shall mean with respect to any Distribution Date, the
close of business on the last Business Day immediately preceding such
Distribution Date.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement among the Trust, the Representative, TMS Auto Holdings, Inc., The
Money Store Auto Finance Inc. and the Owner Trustee, dated as of May 31, 1997,
as the same may be amended and supplemented from time to time.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Security Insurer" shall mean MBIA Insurance Corporation, or its
successor in interest.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
"Trust Certificate" shall mean a Certificate.
SECTION 1.2. OTHER DEFINITIONAL PROVISIONS.
(a) Capitalized terms used herein and not otherwise defined have the
meanings assigned to them in the Sale and Servicing Agreement or, if not defined
therein, in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles as in effect on the date of
this Agreement or any such certificate or other document, as applicable. To the
extent that the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
ARTICLE II
ORGANIZATION
SECTION 2.1. NAME. There is hereby formed a trust to be known as "The
Money Store Auto Trust 1997-2", in which name the Owner Trustee may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
SECTION 2.2. OFFICE. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address as the
Owner Trustee may designate by written notice to the Certificateholders, the
Security Insurer and the Depositor.
SECTION 2.3. PURPOSES AND POWERS. (a) The purpose of the Trust is, and
the Trust shall have the power and authority, to engage in the following
activities:
(i) to issue the Notes pursuant to the Indenture and the Trust
Certificates pursuant to this Agreement, and to sell the Notes and the
Trust Certificates;
(ii) with the proceeds of the sale of the Notes and the Trust
Certificates, to fund the Pre-Funding Account and the Capitalized Interest
Account and to pay the organizational, start-up and transactional expenses
of the Trust and to pay the balance to the Depositor pursuant to the Sale
and Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate (other than the Certificate Policy and the Certificate
Distribution Account) to the Indenture Collateral Agent pursuant to the
Indenture for the benefit of the Security Insurer and the Trustee on behalf
of the Noteholders and to hold, manage and distribute to the
Certificateholders and the Seller pursuant to the terms of the Sale and
Servicing Agreement any portion of the Trust Estate released from the Lien
of, and remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is a party;
(v) to engage in those activities, including entering into agreements,
that are necessary, suitable or convenient to accomplish the foregoing or
are incidental thereto or connected therewith; and
(vi) subject to compliance with the Basic Documents, to engage in such
other activities as may be required in connection with conservation of the
Owner Trust Estate and the making of distributions to the
Certificateholders and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.
SECTION 2.4. APPOINTMENT OF OWNER TRUSTEE. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.5. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Certificate Distribution Account. The Depositor
shall pay organizational expenses of the Trust as they may arise.
SECTION 2.6. DECLARATION OF TRUST. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Owners, subject to
the obligations of the Trust under the Basic Documents. It is the intention of
the parties hereto that the Trust constitute a business trust under the Business
Trust Statute and that this Agreement constitute the governing instrument of
such business trust. It is the intention of the parties hereto that, solely for
income and franchise tax purposes, the Trust shall be treated as a partnership.
The parties agree that, unless otherwise required by appropriate tax
authorities, the Trust will file or cause to be filed annual or other necessary
returns, reports and other forms consistent with the characterization of the
Trust as a partnership for such tax purposes. Effective as of the date hereof,
the Owner Trustee shall have all rights, powers and duties set forth herein and
to the extent not inconsistent herewith, in the Business Trust Statute with
respect to accomplishing the purposes of the Trust. The Owner Trustee shall file
the Certificate of Trust with the Secretary of State.
SECTION 2.7. LIABILITY OF DEPOSITOR AS GENERAL PARTNER. (a) The
General Partner shall pay organizational expenses of the Trust as they may arise
or shall, upon the request of the Owner Trustee, promptly reimburse the Owner
Trustee for any such expenses paid by the Owner Trustee. The General Partner
shall also be liable directly to and will indemnify the injured party for all
losses, claims, damages, liabilities and expenses of the Trust (including
Expenses, to the extent not paid out of the Owner Trust Estate) to the extent
that the General Partner would be liable if the Trust were a partnership under
the Delaware Revised Uniform Limited Partnership Act in which the General
Partner were a general partner; PROVIDED, HOWEVER, that the General Partner
shall not be liable for any losses incurred by an Owner in the capacity of an
investor in the Trust Certificates or a Note Owner in the capacity of an
investor in the Notes. In addition, any third party creditors of the Trust
(other than in connection with the obligations described in the preceding
sentence for which the General Partner shall not be liable) shall be deemed
third party beneficiaries of this paragraph. The obligations of the General
Partner under this paragraph shall be evidenced by the Trust Certificates
described in Section 3.12, which for purposes of the Business Trust Statute
shall be deemed to be a separate class of Trust Certificates from all other
Trust Certificates issued by the Trust.
(b) No Owner, other than to the extent set forth in clause (a), shall
have any personal liability for any liability or obligation of the Trust.
SECTION 2.8. TITLE TO TRUST PROPERTY. (a) Legal title to all the Owner
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
(b) The Owners shall not have legal title to any part of the Trust
Property. The Owners shall be entitled to receive distributions with respect to
their undivided ownership interest therein only in accordance with Articles V
and IX. No transfer, by operation of law or otherwise, of any right, title or
interest by any Certificateholder of its ownership interest in the Owner Trust
Estate shall operate to terminate this Agreement or the trusts hereunder or
entitle any transferee to an accounting or to the transfer to it of legal title
to any part of the Trust Property.
SECTION 2.9. SITUS OF TRUST. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the Owner
Trustee on behalf of the Trust shall be located in the State of Delaware or the
State of New York. Payments will be received by the Trust only in Delaware or
New York and payments will be made by the Trust only from Delaware or New York.
The Trust shall not have any employees in any state other than Delaware;
provided however, that nothing herein shall restrict or prohibit the Owner
Trustee, in its individual capacity, the Servicer or any agent of the Trust from
having employees within or without the State of Delaware. The only office of the
Trust will be at the Corporate Trust Office in Delaware.
SECTION 2.10. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR. The
Depositor makes the following representations and warranties on which the Owner
Trustee relies in accepting the Owner Trust Estate in trust and issuing the
Certificates and upon which the Security Insurer relies in issuing the Policies.
(a) ORGANIZATION AND GOOD STANDING. The Depositor is duly organized
and validly existing as a Delaware corporation with power and authority to
own its properties and to conduct its business as such properties are
currently owned and such business is presently conducted and is proposed to
be conducted pursuant to this Agreement and the Basic Documents.
(b) DUE QUALIFICATION. It is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or
lease of its property, the conduct of its business and the performance of
its obligations under this Agreement and the Basic Documents requires such
qualification.
(c) POWER AND AUTHORITY. The Depositor has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms;
the Depositor has full power and authority to sell and assign the property
to be sold and assigned to and deposited with the Trust and the Depositor
has duly authorized such sale and assignment and deposit to the Trust by
all necessary corporate action; and the execution, delivery and performance
of this Agreement has been duly authorized by the Depositor by all
necessary corporate action.
(d) NO CONSENT REQUIRED. No consent, license, approval or
authorization or registration or declaration with, any Person or with any
governmental authority, bureau or agency is required in connection with the
execution, delivery or performance of this Agreement and the Basic
Documents, except for such as have been obtained, effected or made.
(e) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
certificate of incorporation or by-laws of the Depositor, or any material
indenture, agreement or other instrument to which the Depositor is a party
or by which it is bound; nor result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than pursuant to the Basic
Documents); nor violate any law or, to the best of the Depositor's
knowledge, any order, rule or regulation applicable to the Depositor of any
court or of any Federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Depositor
or its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations pending
or, to its knowledge threatened against it before any court, regulatory
body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over it or its properties (A) asserting
the invalidity of this Agreement or any of the Basic Documents, (B) seeking
to prevent the issuance of the Certificates or the Notes or the
consummation of any of the transactions contemplated by this Agreement or
any of the Basic Documents, (C) seeking any determination or ruling that
might materially and adversely affect its performance of its obligations
under, or the validity or enforceability of, this Agreement or any of the
Basic Documents, or (D) seeking to adversely affect the federal income tax
or other federal, state or local tax attributes of the Certificates.
(g) DEMAND NOTE. It has been duly capitalized by the delivery of a
demand note (the "Demand Note") from the Representative in the amount of
$1,000,000 which Demand Note has not been canceled, waived or terminated.
The proceeds of such Demand Note have not been used and will not be used to
pay (i) any of the expenses of the Depositor in connection with the
transactions contemplated by the Basic Documents or (ii) the purchase price
for the Certificates purchased pursuant to Section 2.3. Such Demand Note is
enforceable against the Depositor, subject to its terms, and subject to
applicable bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws now or hereafter in effect relating to
creditors' rights generally or the rights of creditors of banks the deposit
accounts of which are insured by the Federal Deposit Insurance Corporation
and subject to general principles of equity (whether applied in a
proceeding at law or in equity).
SECTION 2.11. FEDERAL INCOME TAX ALLOCATIONS. Net income of the Trust
for any month as determined for Federal income tax purposes (and each item of
income, gain, loss, credit and deduction entering into the computation thereof)
shall be allocated:
(a) to the extent of available net income, among the
Certificateholders as of the first Record Date following the end of such
month, in proportion to their ownership of principal amount of Trust
Certificates on such date, an amount of net income up to the sum of (i) the
Certificate- holders' Monthly Interest Distributable Amount for such month,
(ii) interest on the excess, if any, of the Certificateholders' Interest
Distributable Amount for the preceding Distribution Date over the amount in
respect of interest at the Certificate Rate that is actually deposited in
the Certificate Distribution Account on such preceding Distribution Date,
to the extent permitted by law, at the Certificate Rate from such preceding
Distribution Date through the current Distribution Date, and (iii) the
portion of the market discount on the Receivables accrued during such month
that is allocable to the excess of the initial aggregate principal amount
of the Trust Certificates over their initial aggregate issue price; and
(b) to the General Partner, to the extent of any remaining net income.
If the net income of the Trust for any month is insufficient for the allocations
described in clause (a) above, subsequent net income shall first be allocated to
make up such shortfall before being allocated as provided in clause (b). Net
losses of the Trust, if any, for any month as determined for Federal income tax
purposes (and each item of income, gain, loss, credit and deduction entering
into the computation thereof) shall be allocated to the General Partner to the
extent the General Partner is reasonably expected as determined by the Servicer
to bear the economic burden of such net losses, then net losses shall be
allocated among the Certificateholders as of the first Record Date following the
end of such month in proportion to their ownership of principal amount of Trust
Certificates on such Record Date until the principal balance of the Trust
Certificates is reduced to zero. The General Partner is authorized to modify the
allocations in this paragraph if necessary or appropriate, in its sole
discretion, for the allocations to fairly reflect the economic income, gain or
loss to the General Partner, the Certificateholders, or as otherwise required by
the Code.
SECTION 2.12. COVENANTS OF THE GENERAL PARTNER. The General Partner
agrees and covenants for the benefit of each Owner, the Security Insurer and the
Owner Trustee, during the term of this Agreement, and to the fullest extent
permitted by applicable law, that:
(a) it shall not assign, sell, convey, pledge, transfer, reconvey,
cancel, forgive, compromise or otherwise dispose of the Demand Note held by it,
in whole or in part;
(b) it shall not sell, assign, transfer, give or encumber, by
operation of law or otherwise, in whole or in part, the interest evidenced by
its certificates acquired pursuant to Section 3.12 without the consent of the
Security Insurer;
(c) other than pursuant to Section 2.7 or in connection with routine
administrative matters, it shall not create, incur or suffer to exist any
indebtedness or engage in any business, except, in each case, as permitted by
its certificate of incorporation and the Basic Documents;
(d) it shall not, for any reason, institute proceedings for the Trust
to be adjudicated a bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to the bankruptcy of the Trust, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of the property of the
Trust or cause or permit the Trust to make any assignment for the benefit of
creditors, or admit in writing the inability of the Trust to pay its debts
generally as they become due, or declare or effect a moratorium on the debt of
the Trust or take any action in furtherance of any such action;
(e) it shall obtain from each counterparty to each Basic Document to
which it or the Trust is a party and each other agreement entered into on or
after the date hereof to which it or the Trust is a party, an agreement by each
such counterparty that prior to the occurrence of the event specified in Section
9.1(e) such counterparty shall not institute against, or join any other Person
in instituting against, it or the Trust, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceedings
under the laws of the United States or any state of the United States;
(f) it shall not, for any reason, withdraw or attempt to withdraw from
this Agreement, dissolve, institute proceedings for it to be adjudicated a
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against it, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of it or a substantial part of
its property, or make any assignment for the benefit of creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action; and
(g) it shall not (i) assign, sell, convey, pledge, transfer, reconvey,
cancel, forgive, compromise or otherwise dispose of the Demand Note held by it,
in whole or in part, or (ii) make any distribution other than to the Trust or
unless the aggregate net worth of the General Partner following such
distribution shall be at least equal to the Minimum Net Worth unless the General
Partner shall deliver to the Owner Trustee, the Trustee and the Security Insurer
an Opinion of Counsel to the effect that the failure to maintain such Minimum
Net Worth shall not cause the Trust to be an association taxable as a
corporation or a publicly traded partnership.
SECTION 2.13. COVENANTS OF THE OWNERS. Each Owner by becoming a
beneficial owner of the Book-Entry Trust Certificate agrees:
(a) to be bound by the terms and conditions of the Certificates of
which such Owner is the beneficial owner and of this Agreement, including any
supplements or amendments hereto and to perform the obligations of an Owner as
set forth therein or herein, in all respects as if it were a signatory hereto.
This undertaking is made for the benefit of the Trust, the Owner Trustee, the
Security Insurer and all other Owners present and future;
(b) to hereby appoint the General Partner as such Owner's agent and
attorney-in-fact to sign any federal income tax information return filed on
behalf of the Trust and agree that, if requested by the Trust, it will sign such
federal income tax information return in its capacity as holder of an interest
in the Trust. Each Owner also hereby agrees that in its tax returns it will not
take any position inconsistent with those taken in any tax returns filed by the
Trust;
(c) if such Owner is other than an individual or other entity holding
its Certificate through a broker who reports securities sales on Form 1099-B, to
notify the Owner Trustee of any transfer by it of a Certificate in a taxable
sale or exchange, within 30 days of the date of the transfer; and
(d) until the completion of the events specified in Section 9.1(e),
not to, for any reason, institute proceedings for the Trust or the General
Partner to be adjudicated a bankrupt or insolvent, or consent to the institution
of bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trust or a substantial part of its property, or cause or permit
the Trust to make any assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action.
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. INITIAL OWNERSHIP. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.5 and until the issuance of
the Trust Certificates, the Depositor shall be the sole beneficiary of the
Trust.
SECTION 3.2. THE TRUST CERTIFICATES. The Trust Certificates shall be
issued in denominations of $1,000 and integral multiples thereof; PROVIDED,
HOWEVER, that Trust Certificates may be issued to the General Partner pursuant
to Section 3.12 in such denominations as to represent at least 1% of the initial
Certificate Balance. The Trust Certificates shall be executed on behalf of the
Trust by manual or facsimile signature of an authorized officer of the Owner
Trustee. Trust Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign on behalf of the Trust, shall be validly issued and entitled
to the benefit of this Agreement, notwithstanding that such individuals or any
of them shall have ceased to be so authorized prior to the authentication and
delivery of such Trust Certificates or did not hold such offices at the date of
authentication and delivery of such Trust Certificates. A transferee of a Trust
Certificate shall become a Certificateholder, and shall be entitled to the
rights and subject to the obligations of a Certificateholder hereunder, upon due
registration of such Trust Certificate in such transferee's name pursuant to
Section 3.4.
SECTION 3.3. AUTHENTICATION OF TRUST CERTIFICATES. Concurrently with
the initial sale of the Receivables to the Trust pursuant to the Sale and
Servicing Agreement, the Owner Trustee shall cause the Trust Certificates in an
aggregate principal amount equal to the initial Certificate Balance to be
executed on behalf of the Trust, authenticated and delivered to or upon the
written order of the Depositor, signed by its chairman of the board, its
president or any vice president, its treasurer or any assistant treasurer
without further corporate action by the Depositor, in authorized denominations.
No Trust Certificate shall entitle its holder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Trust Certificate a certificate of authentication substantially in the form set
forth in Exhibit A, executed by the Owner Trustee or Bankers Trust Company as
the Owner Trustee's authentication agent, by manual signature; such
authentication shall constitute conclusive evidence that such Trust Certificate
shall have been duly authenticated and delivered hereunder. All Trust
Certificates shall be dated the date of their authentication.
SECTION 3.4. REGISTRATION OF TRANSFER AND EXCHANGE OF TRUST
CERTIFICATES. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.8, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Owner
Trustee shall provide for the registration of Trust Certificates and of
transfers and exchanges of Trust Certificates as herein provided. Bankers Trust
Company shall be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Trust Certificate
at the office or agency maintained pursuant to Section 3.8, the Owner Trustee
shall execute, authenticate and deliver (or shall cause Bankers Trust Company as
its authenticating agent to authenticate and deliver), in the name of the
designated transferee or transferees, one or more new Trust Certificates in
authorized denominations of a like class and aggregate face amount dated the
date of authentication by the Owner Trustee or any authenticating agent. At the
option of a Holder, Trust Certificates may be exchanged for other Trust
Certificates of the same class in authorized denominations of a like aggregate
amount upon surrender of the Trust Certificates to be exchanged at the office or
agency maintained pursuant to Section 3.8.
Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Certificateholder or his attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution" meeting
the requirements of the Certificate Registrar, which requirements include
membership or participation in the Securities Transfer Agent's Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Certificate Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act. Each Trust Certificate surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Owner Trustee in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Trust Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Trust Certificates.
SECTION 3.5. MUTILATED, DESTROYED, LOST OR STOLEN TRUST CERTIFICATES.
If (a) any mutilated Trust Certificate shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Trust Certificate and (b)
there shall be delivered to the Certificate Registrar, the Owner Trustee and
(unless an Insurer Default shall have occurred and be continuing) the Security
Insurer, such security or indemnity as may be required by them to save each of
them harmless, then in the absence of notice that such Trust Certificate shall
have been acquired by a bona fide purchaser, the Owner Trustee on behalf of the
Trust shall execute and the Owner Trustee, or Bankers Trust Company, as the
Owner Trustee's authenticating agent, shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust
Certificate, a new Trust Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Certificate under this Section,
the Owner Trustee or the Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Trust Certificate issued pursuant to this
Section shall constitute conclusive evidence of an ownership interest in the
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Trust Certificate shall be found at any time.
SECTION 3.6. PERSONS DEEMED CERTIFICATEHOLDERS. Every Person by virtue
of becoming a Certificateholder or Owner in accordance with this Agreement shall
be deemed to be bound by the terms of this Agreement. Prior to due presentation
of a Trust Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar and the Security Insurer and any agent of the Owner
Trustee, the Certificate Registrar and the Security Insurer, may treat the
Person in whose name any Trust Certificate shall be registered in the
Certificate Register as the Owner of such Trust Certificate for the purpose of
receiving distributions pursuant to Section 5.2 and for all other purposes
whatsoever, and none of the Owner Trustee, the Certificate Registrar or the
Security Insurer nor any agent of the Owner Trustee, the Certificate Registrar
or the Security Insurer shall be bound by any notice to the contrary.
SECTION 3.7. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES. The Owner Trustee shall furnish or cause to be furnished to the
Servicer, the Depositor or (unless an Insurer Default shall have occurred and be
continuing) the Security Insurer, within 15 days after receipt by the Owner
Trustee of a request therefor from such Person in writing, a list, of the names
and addresses of the Certificateholders as of the most recent Record Date. If
three or more Holders of Trust Certificates or one or more Holders of Trust
Certificates evidencing not less than 25% of the Certificate Balance apply in
writing to the Owner Trustee, and such application states that the applicants
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Trust Certificates and such application is
accompanied by a copy of the communication that such applicants propose to
transmit, then the Owner Trustee shall, within five Business Days after the
receipt of such application, afford such applicants access during normal
business hours to the current list of Certificateholders. Each Holder, by
receiving and holding a Trust Certificate, shall be deemed to have agreed not to
hold any of the Depositor, the Servicer the Owner Trustee or the Security
Insurer or any agent thereof accountable by reason of the disclosure of its name
and address, regardless of the source from which such information was derived.
SECTION 3.8. MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee shall
maintain in New York, an office or offices or agency or agencies where Trust
Certificates may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Owner Trustee in respect of the Trust
Certificates and the Basic Documents may be served. The Owner Trustee initially
designates Bankers Trust Company, 4 Albany Street, New York, New York 10006, as
its principal corporate trust office for such purposes. The Owner Trustee shall
give prompt written notice to the Depositor, the Certificateholders and (unless
an Insurer Default shall have occurred and be continuing) the Security Insurer
of any change in the location of the Certificate Register or any such office or
agency.
SECTION 3.9. APPOINTMENT OF CERTIFICATE PAYING Agent. The Certificate
Paying Agent shall make distributions to Certificateholders from the Certificate
Distribution Account pursuant to Section 5.2 and shall report the amounts of
such distributions to the Owner Trustee. Any Certificate Paying Agent shall have
the revocable power to withdraw funds from the Certificate Distribution Account
for the purpose of making the distributions referred to above. The Owner Trustee
may revoke such power and remove the Certificate Paying Agent if the Owner
Trustee determines in its sole discretion that the Certificate Paying Agent
shall have failed to perform its obligations under this Agreement in any
material respect. The Certificate Paying Agent shall initially be Bankers Trust
Company, and any co- paying agent chosen by the Owner Trustee, and acceptable to
the Servicer and the Security Insurer. The Certificate Paying Agent shall be
permitted to resign upon 30 days' written notice to the Owner Trustee and the
Servicer. In the event that the Owner Trustee shall no longer be the Certificate
Paying Agent, the Owner Trustee shall appoint a successor to act as Certificate
Paying Agent (which shall be a bank or trust company). The Owner Trustee shall
cause such successor Certificate Paying Agent or any additional Certificate
Paying Agent appointed by the Owner Trustee to execute and deliver to the Owner
Trustee and (unless an Insurer Default shall have occurred and be continuing)
the Security Insurer an instrument in which such successor Certificate Paying
Agent or additional Certificate Paying Agent shall agree with the Owner Trustee
that as Certificate Paying Agent, such successor Certificate Paying Agent or
additional Certificate Paying Agent will hold all sums, if any, held by it for
payment to the Certificateholders in trust for the benefit of the
Certificateholders (and the Security Insurer) entitled thereto until such sums
shall be paid to such Certificateholders or the Security Insurer. The
Certificate Paying Agent shall return all unclaimed funds to the Owner Trustee
and upon removal of a Certificate Paying Agent such Certificate Paying Agent
shall also return all funds in its possession to the Owner Trustee. The
provisions of Sections 7.1, 7.3, 7.4 and 8.1 shall apply to the Owner Trustee
also in its role as Certificate Paying Agent, for so long as the Owner Trustee
shall act as Certificate Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Agreement to the
Certificate Paying Agent shall include any co-paying agent unless the context
requires otherwise.
SECTION 3.10. [Reserved]
SECTION 3.11. [Reserved]
SECTION 3.12. DISPOSITION BY THE GENERAL PARTNER. On the Closing Date,
the Depositor shall purchase for adequate consideration and retain beneficial
and record ownership of Trust Certificates representing at least 1% of the
initial Certificate Balance, which Trust Certificates shall be issued in
definitive form. Any attempted transfer of any Trust Certificate that would
reduce such interest of the General Partner to below 1% of the Certificate
Balance shall be void; PROVIDED, HOWEVER, that such Trust Certificate may be
transferred to a successor General Partner pursuant to Section 9.2. The Owner
Trustee shall cause any Trust Certificate issued to the General Partner to
contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE, EXCEPT UNDER THE
LIMITED CONDITIONS SPECIFIED IN THE TRUST AGREEMENT".
SECTION 3.13. ERISA RESTRICTIONS. The Certificates may not be acquired
by or for the account of (i) an employee benefit plan (as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) that is subject to the provisions of Title 1 of ERISA, (ii) a plan
described in Section 4975(e)(1) of the Internal Revenue Code of 1985, as
amended, or (iii) any entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (each, a "Benefit Plan"). By
accepting and holding a Certificate, the Holder thereof shall be deemed to have
represented and warranted that it is not a Benefit Plan.
SECTION 3.14. BOOK-ENTRY TRUST CERTIFICATES. The Trust Certificates,
upon original issuance, will be issued in the form of a typewritten Trust
Certificate or Trust Certificates representing Book-Entry Trust Certificates, to
be delivered by or on behalf of the Trust to The Depository Trust Company, the
initial Clearing Agency; PROVIDED, HOWEVER, that one Definitive Certificate (as
defined below) may be issued to the Depositor, as General Partner pursuant to
Section 3.12. Such Book-Entry Trust Certificate shall initially be registered on
the Certificate Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no beneficial owner (other than the General Partner) will
receive a Definitive Trust Certificate representing such beneficial owner's
interest in such Trust Certificate, except as provided in Section 3.16. Unless
and until Definitive Trust Certificates have been issued to beneficial owners
pursuant to Section 3.16:
(i) the provisions of this Section shall be in full force and effect;
(ii) the Certificate Registrar and the Owner Trustee shall be entitled
to deal with the Clearing Agency for all purposes of this Agreement
relating to the Book-Entry Trust Certificates (including the payment of
principal of and interest on the Book-Entry Trust Certificates and the
giving of instructions or directions to Owners of Book- Entry Trust
Certificates) as the sole Holder of Book-Entry Trust Certificates and shall
have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section
shall control;
(iv) the rights of the Owners of the Book-Entry Trust Certificates
shall be exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Owners and the
Clearing Agency and/or the Clearing Agency Participants. Pursuant to the
Certificate Depository Agreement, unless and until Definitive Trust
Certificates are issued pursuant to Section 3.16, the Clearing Agency will
make book-entry transfers among the Clearing Agency Participants and
receive and transmit payments of principal of and interest on the
Book-Entry Trust Certificates to such Clearing Agency Participants; and
(v) whenever this Agreement requires or permits actions to be taken
based upon instructions or directions of Holders of Trust Certificates
evidencing a specified percentage of the Certificate Balance, the Clearing
Agency shall be deemed to represent such percentage only to the extent that
it has received instructions to such effect from Owners and/or Clearing
Agency Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Book-Entry Trust Certificates
and has delivered such instructions in writing to the Owner Trustee.
SECTION 3.15. NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the Owners is required under this Agreement, unless and until
Definitive Trust Certificates shall have been issued to Owners pursuant to
Section 3.16, the Owner Trustee shall give all such notices and communications
specified herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners, except to the General Partner.
SECTION 3.16. DEFINITIVE TRUST CERTIFICATES. If (i) the Servicer
advises the Owner Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to the
Trust Certificates, and the Servicer is unable to locate a qualified successor,
(ii) the Servicer at its option advises the Owner Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency or (iii)
after the occurrence of an Event of Default, Owners of Certificates representing
beneficial interests aggregating at least a majority of the Certificate Balance
advise the Clearing Agency in writing that the continuation of a book-entry
system through the Clearing Agency is no longer in the best interest of the
Owners of Trust Certificates, then the Clearing Agency shall notify all Owners
and the Owner Trustee of the occurrence of any such event and of the
availability of the Definitive Trust Certificates to Owners requesting the same.
Upon surrender to the Owner Trustee of the typewritten Trust Certificate or
Trust Certificates representing the Book Entry Trust Certificates by the
Clearing Agency, accompanied by registration instructions, the Owner Trustee
shall execute and authenticate the Definitive Trust Certificates in accordance
with the instructions of the Clearing Agency. Neither the Certificate Registrar
nor the Owner Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Trust Certificates, the Owner
Trustee shall recognize the Holders of the Definitive Trust Certificates as
Certificateholders. The Definitive Trust Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Owner Trustee, as evidenced by its execution thereof.
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1. PRIOR NOTICE TO OWNERS WITH RESPECT TO CERTAIN MATTERS.
With respect to the following matters, the Owner Trustee shall not take action
unless at least 30 days before the taking of such action, the Owner Trustee
shall have notified the Certificateholders and the Security Insurer in writing
of the proposed action and the Certificateholders shall not have notified the
Owner Trustee in writing prior to the 30th day after such notice is given that
such Certificateholders have withheld consent or provided alternative direction:
(a) the election by the Trust to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Business
Trust Statute or unless such amendment would not materially and adversely
affect the interests of the Owners);
(b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the
Certificateholders; or
(d) except pursuant to Section 11.1(b) of the Sale and Servicing
Agreement, the amendment, change or modification of the Sale and Servicing
Agreement, except to cure any ambiguity or defect or to amend or supplement
any provision in a manner that would not materially adversely affect the
interests of the Certificateholders.
The Owner Trustee shall notify the Certificateholders and the Security Insurer
in writing of any appointment of a successor Note Registrar, Certificate Paying
Agent or Certificate Registrar within five Business Days thereof.
SECTION 4.2. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN
MATTERS. The Owner Trustee shall not have the power, except upon the direction
of the Security Insurer in accordance with the Basic Documents, to (a) remove
the Servicer under the Sale and Servicing Agreement pursuant to Section 8.1
thereof or (b) except as expressly provided in the Basic Documents, sell the
Receivables after the termination of the Indenture. The Owner Trustee shall take
the actions referred to in the preceding sentence only upon written instructions
signed by the Certificateholders or the Security Insurer, as the case may be,
and the furnishing of indemnification satisfactory to the Owner Trustee by the
Certificateholders.
SECTION 4.3. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO BANKRUPTCY.
The Owner Trustee shall not have the power to, and shall not, commence any
proceeding or other actions contemplated by Section 2.12(d) relating to the
Trust without the prior written consent of the Security Insurer (unless an
Insurer Default shall have occurred and be continuing) and the unanimous prior
approval of all Certificateholders and the delivery to the Owner Trustee by each
such Certificateholder of a certificate certifying that such Certificateholder
reasonably believes that the Trust is insolvent.
SECTION 4.4. RESTRICTIONS ON CERTIFICATEHOLDERS' POWER. (a) The
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Agreement or any of the Basic
Documents or would be contrary to Section 2.3 nor shall the Owner Trustee be
obligated to follow any such direction, if given.
(b) No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action, or
proceeding in equity or at law upon or under or with respect to this Agreement
or any Basic Document, unless the Certificateholders are the Instructing Party
pursuant to Section 6.3 and unless a Certificateholder previously shall have
given to the Owner Trustee a written notice of default and of the continuance
thereof, as provided in this Agreement, and also unless Certificateholders
evidencing not less than 25% of the Certificate Balance shall have made written
request upon the Owner Trustee to institute such action, suit or proceeding in
its own name as Owner Trustee under this Agreement and shall have offered to the
Owner Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Owner
Trustee, for 30 days after its receipt of such notice, request, and offer of
indemnity, shall have neglected or refused to institute any such action, suit,
or proceeding, and during such 30-day period no request or waiver inconsistent
with such written request has been given to the Owner Trustee pursuant to and in
compliance with this Section or Section 6.3; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Owner Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb, or prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, or to enforce any right under this Agreement, except in the
manner provided in this Agreement and for the equal, ratable, and common benefit
of all Certificateholders. For the protection and enforcement of the provisions
of this Section 4.4, each and every Certificateholder and the Owner Trustee
shall be entitled to such relief as can be given either at law or in equity.
Nothing in this Agreement shall be construed as giving the Certificateholders
any right to make a claim under the Certificate Policy.
SECTION 4.5. MAJORITY CONTROL. No Certificate Owner shall have any
right to vote or in any manner otherwise control the operation and management of
the Trust except as expressly provided in this Agreement. Except as expressly
provided herein, any action that may be taken by the Certificateholders under
this Agreement may be taken by the Holders of Trust Certificates evidencing not
less than a majority of the Certificate Balance. Except as expressly provided
herein, any written notice of the Certificateholders delivered pursuant to this
Agreement shall be effective if signed by Holders of Certificates evidencing not
less than a majority of the Certificate Balance at the time of the delivery of
such notice.
SECTION 4.6. RIGHTS OF SECURITY INSURER. Notwithstanding anything to
the contrary in the Basic Documents, without the prior written consent of the
Security Insurer (so long as no Insurer Default shall have occurred and be
continuing), the Owner Trustee shall not (i) remove the Servicer, (ii) initiate
any claim, suit or proceeding by the Trust or compromise any claim, suit or
proceeding brought by or against the Trust, other than with respect to the
enforcement of any Receivable or any rights of the Trust thereunder, (iii)
authorize the merger or consolidation of the Trust with or into any other
business trust or other entity (other than in accordance with Section 3.10 of
the Indenture) or (iv) amend the Certificate of Trust.
ARTICLE V
APPLICATION OF TRUST FUNDS:
CERTAIN DUTIES
SECTION 5.1. ESTABLISHMENT OF CERTIFICATE DISTRIBUTION ACCOUNT. (a)
The Owner Trustee, for the benefit of the Certificateholders and the Security
Insurer, shall establish and maintain in the name of the Trust an Eligible
Deposit Account (the "Certificate Distribution Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Certificateholders and the Security Insurer.
(b) The Owner Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Certificate Distribution Account
and in all proceeds thereof. If, at any time, the Certificate Distribution
Account ceases to be an Eligible Deposit Account, the Owner Trustee shall within
five Business Days (or such longer period, not to exceed 30 calendar days, as to
which each Rating Agency and, so long as no Insurer Default shall have occurred
and be continuing, the Security Insurer may consent) establish a new Certificate
Distribution Account as an Eligible Deposit Account and shall transfer any cash
and/or any investments to such new Certificate Distribution Account.
(c) All amounts held in the Certificate Distribution Account shall, to
the extent permitted by applicable laws, rules and regulations, be invested, by
the Owner Trustee at the Servicer's written direction, in Eligible Investments
that mature not later than one Business Day prior to the Distribution Date for
the Monthly Period to which such amounts relate. Investments in Eligible
Investments shall be made in the name of the Trust, and such investments shall
not be sold or disposed of prior to their maturity. Subject to the other
provisions hereof, the Owner Trustee shall have sole control over each such
investment and the income thereon, and any certificate or other instrument
evidencing any such investment, if any, shall be delivered directly to the Owner
Trustee. All Investment Earnings on funds in the Certificate Distribution
Account shall be distributed on the next Distribution Date pursuant to Section
5.6 of the Sale and Servicing Agreement.
SECTION 5.2. APPLICATION OF FUNDS IN CERTIFICATE DISTRIBUTION ACCOUNT.
(a) On each Distribution Date, the Owner Trustee will, based on the information
contained in the Servicer's Certificate delivered on the related Determination
Date pursuant to Section 4.9 of the Sale and Servicing Agreement, distribute to
Certificateholders, to the extent of the funds available, amounts deposited in
the Certificate Distribution Account pursuant to Sections 5.6(b) and 9.1 of the
Sale and Servicing Agreement on such Distribution Date in the following order of
priority:
(i) first, from the amounts deposited in the Certificate Distribution
Account pursuant to Section 5.6(b)(v) or Section 9.1(b)(iii) of the Sale
and Servicing Agreement, to the Certificateholders, on a pro rata basis, an
amount equal to the Certificateholders' Interest Distributable Amount; and
(ii) second, from the amounts deposited in the Certificate
Distribution Account pursuant to Section 5.6(b)(vi) or Section 9.1(b)(iv)
of the Sale and Servicing Agreement, to the Certificateholders, on a pro
rata basis, an amount equal to the Certificateholders' Principal
Distributable Amount.
(b) On the Distribution Date following the date on which amounts
received in respect of the Seller's or the Servicer's exercise of its option to
purchase the corpus of the Trust pursuant to Section 9.1(a) of the Sale and
Servicing Agreement are deposited in the Certificate Distribution Account, the
Owner Trustee will distribute such amounts taking into account any concurrent
distribution made pursuant to Section 5.2(a):
(i) first, to the Certificateholders, on a pro rata basis, an amount
equal to the Certificateholders' Interest Distributable Amount; and
(ii) second, to the Certificateholders, on a pro rata basis, for
amounts due and unpaid on the Certificates for principal.
(c) On the Distribution Date on which Insolvency Proceeds are
deposited in the Certificate Distribution Account pursuant to Section 9.1(b) of
the Sale and Servicing Agreement (or on the Distribution Date immediately
following such deposit if such proceeds are not deposited in the Certificate
Distribution Account on a Distribution Date), the Owner Trustee will distribute
the Insolvency Proceeds so deposited in the Certificate Distribution Account
taking into account any concurrent distribution made pursuant to Section 5.2(a):
(i) first, to the Certificateholders, on a pro rata
basis, an amount equal to the Certificateholders' Interest
Distributable Amount; and
(ii) second, to the Certificateholders, on a pro
rata basis, for amounts due and unpaid on the
Certificates for principal.
(d) On the Distribution Date following the date on which the Trustee
makes payments of money or property in respect of liquidation of the Trust
Property pursuant to Section 5.6 of the Indenture and deposits funds received in
connection with such liquidation in the Certificate Distribution Account, the
Owner Trustee will distribute such funds taking into account any concurrent
distribution made pursuant to Section 5.2(a):
(i) first, to the Certificateholders, on a pro rata basis, an amount
equal to the Certificateholders' Interest Distributable Amount; and
(ii) second, to the Certificateholders, on a pro rata basis, for
amounts due and unpaid on the Certificates for principal; and
(e) On each Distribution Date, the Owner Trustee shall send to each
Certificateholder the statement provided to the Owner Trustee by the Servicer
pursuant to Section 5.8 of the Sale and Servicing Agreement on such Distribution
Date.
(f) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to a Certificateholder, such tax shall reduce
the amount otherwise distributable to the Certificateholder in accordance with
this Section. The Owner Trustee is hereby authorized and directed to retain from
amounts otherwise distributable to the Certificateholders sufficient funds for
the payment of any tax that is legally owed by the Trust (but such authorization
shall not prevent the Owner Trustee from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed with
respect to a Certificateholder shall be treated as cash distributed to such
Certificateholder at the time it is withheld by the Trust and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution (such as a distribution to a non-US
Certificateholder), the Owner Trustee may in it sole discretion withhold such
amounts in accordance with this clause (f). In the event that an Owner wishes to
apply for a refund of any such withholding tax, the Owner Trustee shall
reasonably cooperate with such Certificateholder in making such claim so long as
such Certificateholder agrees to reimburse the Owner Trustee for any
out-of-pocket expenses incurred.
(g) Any funds remaining in the Certificate Distribution Account after
distribution of all amounts specified in this Section 5.2 shall be distributed
to the General Partner.
SECTION 5.3. [Reserved]
SECTION 5.4. METHOD OF PAYMENT. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Distribution Date
shall be made to each Certificateholder of record on the preceding Record Date
either by wire transfer, in immediately available funds, to the account of such
Holder at a bank or other entity having appropriate facilities therefor, if (i)
such Certificateholder shall have provided to the Certificate Registrar
appropriate written instructions at least five Business Days prior to such
Distribution Date and such Holder's Trust Certificates in the aggregate evidence
a denomination of not less than $1,000,000 or (ii) such Certificateholder is the
General Partner, or an Affiliate thereof, or, if not, by check mailed to such
Certificateholder at the address of such holder appearing in the Certificate
Register; PROVIDED, HOWEVER, that, unless Definitive Trust Certificates have
been issued pursuant to Section 3.16, with respect to Trust Certificates
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), distributions will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Notwithstanding the foregoing, the final distribution in respect of any
Trust Certificate (whether on the Final Scheduled Distribution Date or
otherwise) will be payable only upon presentation and surrender of such Trust
Certificate at the office or agency maintained for that purpose by the Owner
Trustee pursuant to Section 3.8.
SECTION 5.5. NO SEGREGATION OF MONIES; NO INTEREST. Subject to
Sections 5.1 and 5.2, monies received by the Owner Trustee hereunder need not be
segregated in any manner except to the extent required by law and may be
deposited under such general conditions as may be prescribed by law, and the
Owner Trustee shall not be liable for any interest thereon.
SECTION 5.6. ACCOUNTING AND REPORTS TO THE NOTE HOLDERS,
CERTIFICATEHOLDERS, THE INTERNAL REVENUE SERVICE AND OTHERS. Subject to Sections
10.1(b)(iii) and 10.1(c) of the Sale and Servicing Agreement, the General
Partner shall (a) maintain (or cause to be maintained) the books of the Trust on
a calendar year basis on the accrual method of accounting, (b) deliver (or cause
to be delivered) to each Certificateholder, as may be required by the Code and
applicable Treasury Regulations, such information as may be required (including
Schedule K-1) to enable each Certificateholder to prepare its Federal and state
income tax returns, (c) file or cause to be filed such tax returns relating to
the Trust (including a partnership information return, Form 1065), and direct
the Owner Trustee to make such elections as may from time to time be required or
appropriate under any applicable state or Federal statute or rule or regulation
thereunder so as to maintain the Trust's characterization as a partnership for
Federal income tax purposes and (d) collect or cause to be collected any
withholding tax as described in and in accordance with Section 5.2(c) with
respect to income or distributions to Certificateholders. The Owner Trustee
shall make all elections pursuant to this Section as directed by the General
Partner. The Owner Trustee shall sign all tax information returns filed pursuant
to this Section 5.6 and any other returns as may be required by law, and in
doing so shall rely entirely upon, and shall have no liability for information
provided by, or calculations provided by, the General Partner. The Owner Trustee
shall elect under Section 1278 of the Code to include in income currently any
market discount that accrues with respect to the Receivables. The Owner Trustee
shall not make the election provided under Section 754 of the Code.
SECTION 5.7. SIGNATURE ON RETURNS; TAX MATTERS PARTNER. (a)
Notwithstanding the provisions of Section 5.6, the Owner Trustee shall sign on
behalf of the Trust the tax returns of the Trust, unless applicable law requires
a Certificateholder or an Owner to sign such documents, in which case such
documents shall be signed by the General Partner.
(b) The General Partner shall be the "tax matters partner" of the
Trust pursuant to the Code.
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. GENERAL AUTHORITY. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is named
as a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is named as a party and
any amendment thereto, in each case, in such form as the Depositor shall approve
as evidenced conclusively by the Owner Trustee's execution thereof, and on
behalf of the Trust, to direct the Trustee to authenticate and deliver Class A-1
Notes in the aggregate principal amount of $160,000,000 and Class A-2 Notes in
the aggregate principal amount of $60,500,000. In addition to the foregoing, the
Owner Trustee is authorized, but shall not be obligated, to take all actions
required of the Trust pursuant to the Basic Documents. The Owner Trustee is
further authorized from time to time to take such action as the Instructing
Party recommends with respect to the Basic Documents so long as such activities
are consistent with the terms of the Basic Documents.
SECTION 6.2. GENERAL DUTIES. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and the Sale and Servicing Agreement and to
administer the Trust in the interest of the Owners, subject to the Basic
Documents and in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Servicer has agreed in the Sale and Servicing
Agreement to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any Basic Document, and the Owner Trustee shall not be liable
for the default or failure of the Servicer to carry out its obligations under
the Sale and Servicing Agreement.
SECTION 6.3. ACTION UPON INSTRUCTION. (a) Subject to Article IV, the
Security Insurer (so long as an Insurer Default shall not have occurred and be
continuing) or the Certificateholders (if an Insurer Default shall have occurred
and be continuing) (the "Instructing Party") shall have the exclusive right to
direct the actions of the Owner Trustee in the management of the Trust, so long
as such instructions are not inconsistent with the express terms set forth
herein or in any Basic Document. The Instructing Party shall not instruct the
Owner Trustee in a manner inconsistent with this Agreement or the Basic
Documents.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such action is likely to
result in liability on the part of the Owner Trustee or is contrary to the terms
hereof or of any Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
Basic Document, the Owner Trustee shall promptly give notice (in such form as
shall be appropriate under the circumstances) to the Instructing Party
requesting instruction as to the course of action to be adopted, and to the
extent the Owner Trustee acts in good faith in accordance with any written
instruction of the Instructing Party received, the Owner Trustee shall not be
liable on account of such action to any Person. If the Owner Trustee shall not
have received appropriate instruction within ten days of such notice (or within
such shorter period of time as reasonably may be specified in such notice or may
be necessary under the circumstances) it may, but shall be under no duty to,
take or refrain from taking such action, not inconsistent with this Agreement or
the Basic Documents, as it shall deem to be in the best interests of the
Certificateholders and the Security Insurer, and shall have no liability to any
Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the Instructing
Party requesting instruction and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable, on account of such action or
inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action, not inconsistent with this Agreement or the Basic
Documents, as it shall deem to be in the best interests of the
Certificateholders and the Security Insurer, and shall have no liability to any
Person for such action or inaction.
SECTION 6.4. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 6.3; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to prepare or file any Commission filing for the Trust or to
record this Agreement or any Basic Document. The Owner Trustee nevertheless
agrees that it will, at its own cost and expense, promptly take all action as
may be necessary to discharge any Liens on any part of the Owner Trust Estate
that result from actions by, or claims against, the Owner Trustee (solely in its
individual capacity) and that are not related to the ownership or the
administration of the Owner Trust Estate.
SECTION 6.5. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the Basic Documents
and (iii) in accordance with any document or instruction delivered to the Owner
Trustee pursuant to Section 6.3.
SECTION 6.6. RESTRICTIONS. The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in Section 2.3
or (b) that, to the actual knowledge of the Owner Trustee, would result in the
Trust's becoming taxable as a corporation for Federal income tax purposes. The
Certificateholders shall not direct the Owner Trustee to take action that would
violate the provisions of this Section.
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
SECTION 7.1. ACCEPTANCE OF TRUSTS AND DUTIES. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement. The Owner
Trustee in its individual capacity also agrees to disburse all moneys actually
received by it constituting part of the Owner Trust Estate upon the terms of the
Basic Documents and this Agreement. The Owner Trustee in its individual capacity
shall not be answerable or accountable hereunder or under any Basic Document
under any circumstances, except (i) for its own willful misconduct, bad faith or
negligence, (ii) in the case of the inaccuracy of any representation or warranty
contained in Section 7.3 expressly made by the Owner Trustee, in its individual
capacity, (iii) for liabilities arising from the failure of the Owner Trustee to
perform obligations expressly undertaken by it in the last sentence of Section
6.4 hereof, (iv) for any investments issued by the Owner Trustee or any branch
or affiliate thereof in its commercial capacity or (v) for taxes, fees or other
charges on, based on or measured by, any fees, commissions or compensation
received by the Owner Trustee, in its individual capacity. In particular, but
not by way of limitation (and subject to the exceptions set forth in the
preceding sentence):
(a) the Owner Trustee shall not be liable for any error of judgment
made by a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of
the Servicer or any Certificateholder;
(c) no provision of this Agreement or any Basic Document shall require
the Owner Trustee to expend or risk funds or otherwise incur any financial
liability in the performance of any of its rights or powers hereunder or
under any Basic Document if the Owner Trustee shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect of
the validity or sufficiency of this Agreement or for the due execution
hereof by the Depositor or for the form, character, genuineness,
sufficiency, value or validity of any of the Owner Trust Estate or for or
in respect of the validity or sufficiency of the Basic Documents, other
than the certificate of authentication on the Trust Certificates, and the
Owner Trustee shall in no event assume or incur any liability, duty or
obligation to the Security Insurer, Trustee, Indenture Collateral Agent,
the Collateral Agent, any Noteholder or to any Certificateholder, other
than as expressly provided for herein and in the Basic Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Security Insurer, the Trustee or the Servicer under any
of the Basic Documents or otherwise and the Owner Trustee shall have no
obligation or liability to perform the obligations of the Trust under this
Agreement or the Basic Documents that are required to be performed by the
Security Insurer under the Certificate Policy, by the Trustee under the
Indenture or the Servicer under the Sale and Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Basic Document, at the request, order or
direction of any of the Certificateholders, unless such Certificateholders
have offered to the Owner Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities that may be incurred by the
Owner Trustee therein or thereby. The right of the Owner Trustee to perform
any discretionary act enumerated in this Agreement or in any Basic Document
shall not be construed as a duty, and the Owner Trustee shall not be
answerable for other than its negligence, bad faith or willful misconduct
in the performance of any such act.
SECTION 7.2. FURNISHING OF DOCUMENTS. The Owner Trustee shall furnish
to the Certificateholders promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.
SECTION 7.3. REPRESENTATIONS AND WARRANTIES. The Owner Trustee in its
individual capacity hereby represents and warrants to the Depositor, the Owners
and the Security Insurer (which shall have relied on such representations and
warranties in issuing the Policies), that:
(a) It is a Delaware banking corporation, duly organized and validly
existing in good standing under the laws of the State of Delaware. It has
all requisite corporate power and authority to execute, deliver and perform
its obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this Agreement,
nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the terms or provisions hereof will contravene
any federal or Delaware state law, governmental rule or regulation
governing the banking or trust powers of the Owner Trustee or any judgment
or order binding on it, or constitute any default under its charter
documents or by-laws or any indenture, mortgage, contract, agreement or
instrument to which it is a party or by which any of its properties may be
bound.
SECTION 7.4. RELIANCE; ADVICE OF COUNSEL. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties. The Owner Trustee may accept a certified copy of
a resolution of the board of directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or matter the
method of the determination of which is not specifically prescribed herein, the
Owner Trustee may for all purposes hereof rely on a certificate, signed by the
president or any vice president or by the treasurer, secretary or other
authorized officers of the relevant party, as to such fact or matter, and such
certificate shall constitute full protection to the Owner Trustee for any action
taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such persons and not contrary to this Agreement or
any Basic Document herein.
SECTION 7.5. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided
herein or in any other Basic Document, in accepting the trusts hereby created
Bankers Trust (Delaware) acts solely as Owner Trustee hereunder and not in its
individual capacity and all Persons having any claim against the Owner Trustee
by reason of the transactions contemplated by this Agreement or any Basic
Document shall look only to the Owner Trust Estate for payment or satisfaction
thereof.
SECTION 7.6. OWNER TRUSTEE NOT LIABLE FOR TRUST CERTIFICATES OR
RECEIVABLES. The recitals contained herein and in the Trust Certificates (other
than the signature and countersignature of the Owner Trustee on the Trust
Certificates) shall be taken as the statements of the Depositor and the Owner
Trustee assumes no responsibility for the correctness thereof. The Owner Trustee
makes no representations as to the validity or sufficiency of this Agreement, of
any Basic Document or of the Trust Certificates (other than the signature and
countersignature of the Owner Trustee on the Trust Certificates) or the Notes,
or of any Receivable or related documents. The Owner Trustee shall at no time
have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Receivable, or the perfection and priority of
any security interest created by any Receivable in any Financed Vehicle or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Owner Trust Estate or its ability to generate the payments to
be distributed to Certificateholders under this Agreement or the Noteholders
under the Indenture, including, without limitation: the existence, condition and
ownership of any Financed Vehicle; the existence and enforceability of any
insurance thereon; the existence and contents of any Receivable on any computer
or other record thereof; the validity of the assignment of any Receivable to the
Trust or of any intervening assignment; the completeness of any Receivable; the
performance or enforcement of any Receivable; the compliance by the Depositor or
the Servicer with any warranty or representation made under any Basic Document
or in any related document or the accuracy of any such warranty or
representation or any action of the Trustee or the Servicer or any subservicer
taken in the name of the Owner Trustee.
SECTION 7.7. OWNER TRUSTEE MAY OWN TRUST CERTIFICATES AND NOTES. The
Owner Trustee in its individual or any other capacity may become the owner or
pledgee of Trust Certificates or Notes and may deal with the Depositor, the
Trustee and the Servicer in banking transactions with the same rights as it
would have if it were not Owner Trustee.
SECTION 7.8. PAYMENTS FROM OWNER TRUST ESTATE. All payments to be made
by the Owner Trustee under this Agreement or any of the Basic Documents to which
the Trust or the Owner Trustee is a party shall be made only from the income and
proceeds of the Owner Trust Estate and only to the extent that the Owner Trust
shall have received income or proceeds from the Owner Trust Estate to make such
payments in accordance with the terms hereof. Bankers Trust (Delaware), or any
successor thereto, in its individual capacity, shall not be liable for any
amounts payable under this Agreement or any of the Basic Documents to which the
Trust or the Owner Trustee is a party.
SECTION 7.9. DOING BUSINESS IN OTHER JURISDICTIONS. Notwithstanding
anything contained to the contrary, neither Bankers Trust (Delaware) or any
successor thereto, nor the Owner Trustee shall be required to take any action in
any jurisdiction other than in the State of Delaware if the taking of such
action will, even after the appointment of a co-trustee or separate trustee in
accordance with Section 10.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of Delaware; (ii)
result in any fee, tax or other governmental charge under the laws of the State
of Delaware becoming payable by Bankers Trust (Delaware) (or any successor
thereto); or (iii) subject Bankers Trust (Delaware) (or any successor thereto)to
personal jurisdiction in any jurisdiction other than the State of Delaware for
causes of action arising from acts unrelated to the consummation of the
transactions by Bankers Trust (Delaware) (or any successor thereto) or the Owner
Trustee, as the case may be, contemplated hereby.
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.1. OWNER TRUSTEE'S FEES AND EXPENSES. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between the Representative and the
Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed by the
General Partner for its other reasonable expenses hereunder, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder; PROVIDED, HOWEVER, that the Owner Trustee shall only be entitled to
reimbursement for expenses hereunder to the extent such expenses (i) are fees of
outside counsel engaged by the Owner Trustee in respect of the performance of
its obligations hereunder, but up to a dollar amount not to exceed the amount
previously agreed to with the Representative or (ii) relate to the performance
of its obligations pursuant to Section 5.6 hereof.
SECTION 8.2. INDEMNIFICATION. The General Partner shall be liable as
primary obligor for, and shall indemnify the Owner Trustee and its successors,
assigns, agents and servants (collectively, the "Indemnified Parties") from and
against, any and all liabilities, obligations, losses, damages, taxes, claims,
actions and suits, and any and all reasonable costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses") which may at any time be imposed on, incurred by, or
asserted against the Owner Trustee or any Indemnified Party in any way relating
to or arising out of this Agreement, the Basic Documents, the Owner Trust
Estate, the administration of the Owner Trust Estate or the action or inaction
of the Owner Trustee hereunder, except only that the General Partner shall not
be liable for or required to indemnify the Owner Trustee from and against
Expenses arising or resulting from any of the matters described in the third
sentence of Section 7.1. The indemnities contained in this Section shall survive
the resignation or termination of the Owner Trustee or the termination of this
Agreement. In any event of any claim, action or proceeding for which indemnity
will be sought pursuant to this Section, the Owner Trustee's choice of legal
counsel shall be subject to the approval of the General Partner which approval
shall not be unreasonably withheld.
SECTION 8.3. PAYMENTS TO THE OWNER TRUSTEE. Any amounts paid to the
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part of
the Owner Trust Estate immediately after such payment.
SECTION 8.4. NON-RECOURSE OBLIGATIONS. Notwithstanding anything in
this Agreement or any Basic Document, the Owner Trustee agrees in its individual
capacity and in its capacity as Owner Trustee for the Trust that all obligations
of the Trust to the Owner Trustee individually or as Owner Trustee for the Trust
shall be recourse to the Owner Trust Estate only and specifically shall not be
recourse to the assets of any Owner.
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
SECTION 9.1. TERMINATION OF TRUST AGREEMENT. (a) This Agreement and
the Trust shall terminate and be of no further force or effect upon the latest
of (i) the maturity or other liquidation of the last Receivable (including the
purchase by the Servicer at its option of the corpus of the Trust as described
in Section 9.1 of the Sale and Servicing Agreement) and the subsequent
distribution of amounts in respect of such Receivables as provided in the
Related Documents, (ii) the payment to Certificateholders of all amounts
required to be paid to them pursuant to this Agreement and the payment to the
Security Insurer of all amounts payable or reimbursable to it , or (iii) at the
time provided in Section 9.2; PROVIDED, HOWEVER, that in no event shall the
trust created by this Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants living on the date of this
Agreement of Rose Kennedy of the Commonwealth of Massachusetts; and provided,
further, that the rights to indemnification under Section 8.2 shall survive the
termination of the Trust. The Servicer shall promptly notify the Owner Trustee
and the Security Insurer of any prospective termination pursuant to this Section
9.1. Except as provided in Section 9.2, the bankruptcy, liquidation,
dissolution, death or incapacity of any Certificateholder or Owner, other than
the General Partner as described in Section 9.2, shall not (x) operate to
terminate this Agreement or the Trust, nor (y) entitle such Certificateholder's
or Owner's legal representatives or heirs to claim an accounting or to take any
action or proceeding in any court for a partition or winding up of all or any
part of the Trust or Owner Trust Estate nor (z) otherwise affect the rights,
obligations and liabilities of the parties hereto.
(b) Except as provided in clause (a), neither the Depositor nor the
General Partner nor any Certificateholder shall be entitled to revoke or
terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which the Certificate holders shall surrender their Trust
Certificates to the Certificate Paying Agent for payment of the final
distribution and cancellation, shall be given by the Owner Trustee by letter to
Certificateholders mailed within five Business Days of receipt of notice of such
termination from the Servicer given pursuant to Section 9.1(c) of the Sale and
Servicing Agreement, stating (i) the Distribution Date upon or with respect to
which final payment of the Trust Certificates shall be made upon presentation
and surrender of the Trust Certificates at the office of the Certificate Paying
Agent therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Trust Certificates at the office of the Certificate Paying Agent therein
specified. The Owner Trustee shall give such notice to the Certificate Registrar
(if other than the Owner Trustee) and the Certificate Paying Agent at the time
such notice is given to Certificateholders. Upon presentation and surrender of
the Trust Certificates, the Certificate Paying Agent shall cause to be
distributed to Certificateholders amounts distributable on such Distribution
Date pursuant to Section 5.2.
In the event that all of the Certificateholders shall not surrender
their Trust Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Owner Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Trust Certificates for cancellation and receive the final distribution with
respect thereto. If within one year after the second notice all the Trust
Certificates shall not have been surrendered for cancellation, the Owner Trustee
may take appropriate steps, or may appoint an agent to take appropriate steps,
to contact the remaining Certificateholders concerning surrender of their Trust
Certificates, and the cost thereof shall be paid out of the funds and other
assets that shall remain subject to this Agreement. Any funds remaining in the
Trust after exhaustion of such remedies shall be distributed, subject to
applicable escheat laws, by the Owner Trustee to the General Partner. As soon as
practicable after the termination of the Trust, the Owner Trustee shall
surrender the Certificate Policy to the Security Insurer for cancellation.
(d) Any funds remaining in the Trust after funds for final
distribution have been distributed or set aside for distribution shall be
distributed by the Owner Trustee to the General Partner.
(e) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
SECTION 9.2. DISSOLUTION UPON BANKRUPTCY OF THE GENERAL PARTNER. In
the event that an Insolvency Event shall occur with respect to the General
Partner, this Agreement shall be terminated in accordance with Section 9.1 90
days after the date of such Insolvency Event, unless, before the end of such
90-day period, the Owner Trustee shall have received written instructions from
the Instructing Party to the effect that such party disapproves of the
liquidation of the Receivables and termination of the Trust. Promptly after the
occurrence of any Insolvency Event with respect to the General Partner, (i) the
General Partner shall give the Trustee, the Owner Trustee and the Security
Insurer written notice of such Insolvency Event, (ii) the Owner Trustee shall,
upon the receipt of such written notice from the General Partner, give prompt
written notice to the Certificateholders and the Trustee of the occurrence of
such event and (iii) the Trustee shall, upon receipt of written notice of such
Insolvency Event from the Owner Trustee or the General Partner, give prompt
written notice to the Noteholders of the occurrence of such event; PROVIDED,
however, that any failure to give a notice required by this sentence shall not
prevent or delay, in any manner, a termination of the Trust pursuant to the
first sentence of this Section 9.2. Upon a termination pursuant to this Section,
the Security Insurer or, if an Insurer Default has occurred and is continuing,
the Owner Trustee shall direct the Trustee promptly to sell the assets of the
Owner Trust Estate (other than the Certificate Policy) in a commercially
reasonable manner and on commercially reasonable terms. The proceeds of such a
sale of the assets of the Trust shall be treated as collections under the Sale
and Servicing Agreement and shall be distributed in accordance with Section
9.1(b) thereof.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee shall at all times be a corporation (i) satisfying the provisions of
Section 3807(a) of the Business Trust Statute; (ii) authorized to exercise
corporate trust powers; (iii) having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authorities; and (iv) acceptable to the Security Insurer in its sole discretion,
so long as an Insurer Default shall not have occurred and be continuing. If such
corporation shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Owner Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Owner Trustee shall resign immediately in the manner and with
the effect specified in Section 10.2.
SECTION 10.2. RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the General Partner, the Security Insurer
and the Servicer. Upon receiving such notice of resignation, the General Partner
shall promptly appoint a successor Owner Trustee acceptable to the Security
Insurer by written instrument, in duplicate, one copy of which instrument shall
be delivered to the resigning Owner Trustee and one copy to the successor Owner
Trustee, provided that the General Partner shall have received written
confirmation from each of the Rating Agencies that the proposed appointment will
not result in an increased capital charge to the Security Insurer by either of
the Rating Agencies. If no successor Owner Trustee shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee or the Security Insurer may petition
any court of competent jurisdiction for the appointment of a successor Owner
Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the General Partner, or if at any time the Owner
Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the General Partner with the consent of the
Security Insurer (so long as an Insurer Default shall not have occurred and be
continuing) or the Security Insurer may remove the Owner Trustee. If the General
Partner shall remove the Owner Trustee under the authority of the immediately
preceding sentence, the General Partner shall promptly appoint a successor Owner
Trustee acceptable to the Security Insurer by written instrument, in duplicate,
one copy of which instrument shall be delivered to the outgoing Owner Trustee so
removed, one copy to the Security Insurer and one copy to the successor Owner
Trustee and payment of all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.3 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The General Partner shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.
SECTION 10.3. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
General Partner, the Servicer, the Security Insurer and to its predecessor Owner
Trustee an instrument accepting such appointment under this Agreement, and
thereupon the resignation or removal of the predecessor Owner Trustee shall
become effective and such successor Owner Trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor under this Agreement, with like effect as if
originally named as Owner Trustee. The predecessor Owner Trustee shall upon
payment of its fees and expenses deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement; and the
General Partner and the predecessor Owner Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all such rights,
powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the Servicer shall mail notice of the successor of such Owner
Trustee to all Certificateholders, the Security Insurer, the Trustee, the
Noteholders and the Rating Agencies. If the Servicer shall fail to mail such
notice within 10 days after acceptance of appointment by the successor Owner
Trustee, the successor Owner Trustee shall cause such notice to be mailed at the
expense of the Servicer.
SECTION 10.4. MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section 10.1,
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding;
provided further that the Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.
SECTION 10.5. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle may at the time be located,
the Servicer and the Owner Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Owner Trustee and the Security Insurer to act as co-trustee, jointly with
the Owner Trustee, or separate trustee or separate trustees, of all or any part
of the Owner Trust Estate, and to vest in such Person, in such capacity, such
title to the Trust, or any part thereof, and, subject to the other provisions of
this Section, such powers, duties, obligations, rights and trusts as the
Servicer and the Owner Trustee may consider necessary or desirable. If the
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, the Owner Trustee subject, unless an
Insurer Default shall have occurred and be continuing, to the approval of the
Security Insurer (which approval shall not be unreasonably withheld) shall have
the power to make such appointment. No co-trustee or separate trustee under this
Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to Section 10.1 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 10.3.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed
by the Owner Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized
to act separately without the Owner Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular
act or acts are to be performed, the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement;
and
(iii) the Servicer and the Owner Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co- trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Servicer and the Security Insurer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 SUPPLEMENTS AND AMENDMENTS. (a) This Agreement may be
amended by the Depositor and the Owner Trustee, with the prior written consent
of the Security Insurer (so long as an Insurer Default shall not have occurred
and be continuing) and with prior written notice to the Rating Agencies, without
the consent of any of the Noteholders or the Certificateholders, (i) to cure any
ambiguity or defect or (ii) to correct, supplement or modify any provisions in
this Agreement; PROVIDED, HOWEVER, that such action shall not, as evidenced by
an Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder or Certificateholder.
(b) This Agreement may also be amended from time to time, with the
prior written consent of the Security Insurer (so long as an Insurer Default
shall not have occurred and be continuing) by the Depositor and the Owner
Trustee, with prior written notice to the Rating Agencies, with the consent of
the Holders of Notes evidencing not less than a majority of the Outstanding
Amount of the Notes and, to the extent such amendment materially and adversely
affects the interests of the Noteholders, the consent of the Holders of
Certificates evidencing not less than a majority of the Certificate Balance
(which consent of any Holder of a Certificate or Note given pursuant to this
Section or pursuant to any other provision of this Agreement shall be conclusive
and binding on such Holder and on all future Holders of such Certificate or Note
and of any Certificate or Note issued upon the transfer thereof or in exchange
thereof or in lieu thereof whether or not notation of such consent is made upon
the Certificate or Note) for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders or the Certificateholders;
PROVIDED, HOWEVER, that, subject to the express rights of the Security Insurer
under the Basic Documents, no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Receivables or distributions that shall be required to be made for
the benefit of the Noteholders or the Certificateholders or (b) reduce the
aforesaid percentage of the Outstanding Amount of the Notes and the Certificate
Balance required to consent to any such amendment, without the consent of the
Holders of all the outstanding Notes and Holders of all outstanding
Certificates.
Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Trustee and each of the
Rating Agencies.
It shall not be necessary for the consent of Certificateholders, the
Noteholders or the Trustee pursuant to this Section to approve the particular
form of any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of obtaining such
consents (and any other consents of Certificateholders provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Owner Trustee may prescribe.
Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 11.2. NO LEGAL TITLE TO OWNER TRUST ESTATE IN
CERTIFICATEHOLDERS. The Certificateholders shall not have legal title to any
part of the Owner Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their undivided ownership interest therein
only in accordance with Articles V and IX. No transfer, by operation of law or
otherwise, of any right, title or interest of the Certificateholders to and in
their ownership interest in the Owner Trust Estate shall operate to terminate
this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Owner
Trust Estate.
SECTION 11.3. LIMITATIONS ON RIGHTS OF OTHERS. Except for Section 2.7,
the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Security Insurer, the Depositor, the Certificateholders, the
Servicer and, to the extent expressly provided herein, the Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall be
construed to give to any other Person any legal or equitable right, remedy or
claim in the Owner Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 11.4. NOTICES. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt personally delivered, delivered by overnight courier
or mailed first class mail or certified mail, in each case return receipt
requested, and shall be deemed to have been duly given upon receipt, if to the
Owner Trustee, addressed to the Corporate Trust Office; if to the Depositor,
addressed to TMS Auto Holdings, Inc., 1625 West North Market Blvd., Suite 210,
Sacramento, California 95834, Attention: Executive Vice President; if to the
Security Insurer, addressed to MBIA Insurance Corporation, 113 King Street,
Armonk, NY 10504, Attention: Insured Portfolio Management - SF; or, as to each
party, at such other address as shall be designated by such party in a written
notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
SECTION 11.5. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.6. SEPARATE COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.7. THIRD-PARTY BENEFICIARIES. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Except as otherwise provided in this
Agreement, no other Person shall have any right or obligation hereunder. Upon
issuance of the Certificate Policy, this Agreement shall also inure to the
benefit of the Security Insurer for so long as an Insurer Default shall not have
occurred and be continuing and the Security Insurer shall be deemed an express
third party beneficiary of this Agreement entitled to enforce the terms of this
Agreement as if it were a party hereto. Without limiting the generality of the
foregoing, all covenants and agreements in this Agreement which confer rights
upon the Security Insurer shall be for the benefit of and run directly to the
Security Insurer, and the Security Insurer shall be entitled to rely on and
enforce such covenants, subject, however, to the limitations on such rights
provided in this Agreement and the Basic Documents. The Security Insurer may
disclaim any of its rights and powers under this Agreement (but not its duties
and obligations under the Policies) upon delivery of a written notice to the
Owner Trustee.
SECTION 11.8. [Reserved]
SECTION 11.9. NO PETITION. The Owner Trustee (not in its individual
capacity but solely as Owner Trustee), by entering into this Agreement, each
Certificateholder, by accepting a Trust Certificate, and the Trustee and each
Noteholder by accepting the benefits of this Agreement, hereby covenants and
agrees that they will not at any time institute against the General Partner or
the Trust, or join in any institution against the General Partner or the Trust
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Trust Certificates, the Notes, this Agreement or any of the Basic Documents.
SECTION 11.10. NO RECOURSE. Each Certificateholder by accepting a
Trust Certificate acknowledges that such Certificateholder's Trust Certificates
represent beneficial interests in the Trust only and do not represent interests
in or obligations of the Seller, the Servicer, the General Partner, the Owner
Trustee, the Trustee, the Security Insurer or any Affiliate thereof and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated in this Agreement, the Trust Certificates or
the Basic Documents.
SECTION 11.11. HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.13. [Reserved]
SECTION 11.14. SERVICER. The Servicer is authorized to prepare, or
cause to be prepared, execute and deliver on behalf of the Trust all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Trust or Owner Trustee to prepare, file or deliver pursuant
to the Basic Documents. Upon written request, the Owner Trustee shall execute
and deliver to the Servicer a limited power of attorney appointing the Servicer
the Trust's agent and attorney-in-fact to prepare, or cause to be prepared,
execute and deliver all such documents, reports, filings, instruments,
certificates and opinions.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the day and year first above written.
BANKERS TRUST (DELAWARE),
Owner Trustee
By: ---------------------
Name:
Title:
TMS AUTO HOLDINGS, INC.,
Depositor
By:---------------------
Name:
Title:
<PAGE>
EXHIBIT A
NUMBER $
R- CUSIP NO.
SEE REVERSE FOR CERTAIN DEFINITIONS
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS TRUST CERTIFICATE IS DISTRIBUTABLE IN
INSTALLMENTS AS SET FORTH IN THE TRUST AGREEMENT. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL OF THIS TRUST CERTIFICATE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.]
[THIS CERTIFICATE IS NOT TRANSFERABLE]*
* To be inserted on the Certificate to be held by the General Partner.
6.64% ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in certain distributions of the
Trust, as defined below, the property of which includes a pool of retail
installment sale contracts secured by new or used automobiles, vans or light
duty trucks and sold to the Trust by TMS Auto Holdings, Inc.
(THIS TRUST CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF TMS
AUTO HOLDINGS, INC. OR ANY OF ITS AFFILIATES, EXCEPT TO THE EXTENT DESCRIBED
BELOW.)
THIS CERTIFIES THAT is the registered owner of DOLLARS nonassessable,
fully-paid, beneficial ownership interest in certain distributions of The Money
Store Auto Trust 1997-2 (the "Trust") formed by TMS Auto Holdings, Inc., a (the
"Seller"). The Trust Certificates have a certificate Rate of 6.64% per annum.
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the
within-mentioned Trust Agreement.
BANKERS TRUST (DELAWARE) BANKERS TRUST (DELAWARE)
not in its individual not in its individual
capacity but solely as capacity but solely as
Owner Trustee or Owner Trustee
By BANKERS TRUST COMPANY,
Authenticating Agent
by__________________________
by________________________
The Trust was created pursuant to a Trust Agreement dated as of May
31, 1997 (the "Trust Agreement"), between the Seller and Bankers Trust
(Delaware), as owner trustee (the "Owner Trustee"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Trust Agreement.
This Certificate is one of the duly authorized Trust Certificates
designated as "6.64% Asset Backed Certificates" (herein called the "Trust
Certificates"). Also issued under the Indenture dated as of May 31, 1997, among
the Trust, The Chase Manhattan Bank, as trustee and indenture collateral agent,
are two classes of Notes designated as "Class A-1 6.17% Asset Backed Notes" (the
"Class A-l Notes")" and "Class A-2 6.495% Asset Backed Notes" (the "Class A-2
Notes", together with the Class A- 1 Notes, the "Notes"). This Trust Certificate
is issued under and is subject to the terms, provisions and conditions of the
Trust Agreement, to which Trust Agreement the holder of this Trust Certificate
by virtue of the acceptance hereof assents and by which such holder is bound.
The property of the Trust includes a pool of retail installment sale contracts
secured by new and used automobiles, vans or light duty trucks (the
"Receivables"), all monies received thereunder on or after Initial Cutoff Date,
security interests in the vehicles financed thereby, certain bank accounts and
the proceeds thereof, proceeds from claims on certain insurance policies and
certain other rights under the Trust Agreement and the Sale and Servicing
Agreement, all right, to the and interest of the Seller in and to the Purchase
Agreement dated as of May 31, 1997 between The Money Store Auto Finance Inc. and
the Seller and all proceeds of the foregoing.
Under the Trust Agreement, there will be distributed on the 20th day
of each month or, if such 20th day is not a Business Day, the next Business Day
(the "Distribution Date"), commencing in July 1997, to the Person in whose name
this Trust Certificate is registered at the close of business on the Business
Day preceding such Distribution Date (the "Record Date") such
Certificateholder's fractional undivided interest in the amount to be
distributed to Certificateholders on such Distribution Date. No principal will
be paid on the Trust Certificate until the Class A-2 Notes have been paid in
full.
The holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement, the Indenture and the Trust Agreement, as applicable.
The Certificates are entitled to the benefits of a certificate
guaranty insurance policy (the "Certificate Policy") issued by MBIA Insurance
Corporation (the "Security Insurer"), pursuant to which the Security Insurer has
unconditionally guaranteed payment of the Certificate Insured Payment, on each
Distribution Date, all and to the extent as more fully set forth in the Sale and
Servicing Agreement.
It is the intent of the Seller, Servicer, holder of the General
Partner and Certificateholders that, for purposes of Federal income taxes, the
Trust will be treated as a partnership and the Certificateholders (including the
General Partner) will be treated as partners in that partnership. The General
Partner and the other Certificateholders by acceptance of a Trust Certificate,
agree to treat, and to take no action inconsistent with the treatment of, the
Trust Certificates for such tax purposes as partnership interests in the Trust.
Each Certificateholder, by its acceptance of a Trust Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the General Partner, or join in any institution against the General
Partner of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating to
the Trust Certificates, the Notes, the Trust Agreement or any of the Basic
Documents.
Distributions on this Trust Certificate will be made as provided in
the Trust Agreement by the Owner Trustee by wire transfer or check mailed to the
Certificateholder of record in the Trust Certificate Register without the
presentation or surrender of this Trust Certificate or the making of any
notation hereon, except that with respect to Trust Certificates registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Except as
otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Trust Certificate will be made after due notice by
the Owner Trustee of the pendency of such distribution and only upon
presentation and surrender of this Trust Certificate at the office or agency
maintained for the purpose by the Owner Trustee in the Borough of Manhattan, The
City of New York.
Reference is hereby made to the further provisions of this Trust
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Trust Certificate shall not entitle the holder hereof to any benefit under
the Trust Agreement or the Sale and Servicing Agreement or be valid for any
purpose.
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Trust Certificate to be duly
executed.
THE MONEY STORE AUTO TRUST 1997-2
By: BANKERS TRUST (DELAWARE)
not in its individual
capacity but solely as
Owner Trustee
Dated: By: ________________________
- --------
<PAGE>
(Reverse of Trust Certificate)
The Trust Certificates do not represent an obligation of, or an
interest in, the Seller, the Servicer, the General Partner, the Owner Trustee or
any Affiliates of any of them and no recourse may be had against such parties or
their assets, except as may be expressly set forth or contemplated herein or in
the Trust Agreement, the Indenture or the Basic Documents. In addition, this
Trust Certificate is not guaranteed by any governmental agency or
instrumentality and is limited in right of payment to certain collections with
respect to the Receivables and payments under the Certificate Policy, all as
more specifically set forth herein and in the Sale and Servicing Agreement. The
Trust Certificates are limited in right of payment to certain collections and
recoveries respecting the Receivables, all as more specifically set forth in the
Sale and Servicing Agreement. A copy of each of the Sale and Servicing Agreement
and the Trust Agreement may be examined during normal business hours at the
principal office of the Seller, and at such other places, if any, designated by
the Seller, by any Certificateholder upon written request.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Seller and the rights of the Certificateholders under the Trust Agreement at any
time by the Seller and the Owner Trustee with the consent of the holders of the
Notes and the Trust Certificates evidencing not less than a majority of the
outstanding Notes and the Certificate Balance. Any such consent by the holder of
this Trust Certificate shall be conclusive and binding on such holder and on all
future holders of this Trust Certificate and of any Trust Certificate issued
upon the transfer hereof or in exchange hereof or in lieu hereof whether or not
notation of such consent is made upon this Trust Certificate. The Trust
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of the holders of any of the Trust Certificates.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Trust Certificate is
registerable in the Certificate Register upon surrender of this Trust
Certificate for registration of transfer at the offices or agencies of the
Certificate Registrar maintained by the Owner Trustee in the Borough of
Manhattan, The City of New York, accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Trust Certificates in authorized
denominations evidencing the same aggregate interest in the Trust will be issued
to the designated transferee. The initial Certificate Registrar appointed under
the Trust Agreement is Bankers Trust Company.
Except for Trust Certificates issued to the Depositor and transferred
the General Partner, the Trust Certificates are issuable only as registered
Trust Certificates without coupons in denominations of $1,000 or integral
multiples thereof; except as otherwise provided in the Trust Agreement. As
provided in the Trust Agreement and subject to certain limitations therein set
forth, Trust Certificates are exchangeable for new Trust Certificates in
authorized denominations evidencing the same aggregate denomination, as
requested by the holder surrendering the same. No service charge will be made
for any such registration of transfer or exchange, but the Owner Trustee or the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Registrar, the Security Insurer and
any agent of the Owner Trustee, the Certificate Registrar or the Security
Insurer may treat the person in whose name this Trust Certificate is registered
as the owner hereof for all purposes, and none of the Owner Trustee, the
Certificate Registrar, the Security Insurer nor any such agent shall be affected
by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Sale and Servicing Agreement and the disposition of all
property held as part of the Trust. The Servicer of the Receivables may at its
option purchase the corpus of the Trust at a price specified in the Sale and
Servicing Agreement, and such purchase of the Receivables and other property of
the Trust will effect early retirement of the Trust Certificates; however, such
right of purchase is exercisable, subject to certain restrictions, only as of
the last day of any Monthly Period as of which the Pool Balance is 10% or less
of the Original Pool Balance.
The Trust Certificates may not be acquired by (a) an employee benefit
plan (as defined in Section 3(3) of ERISA) that is subject to the provisions of
Title 1 of ERISA, (b) a plan described in Section 4975(e) (l) of the Code or (c)
any entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding this
Trust Certificate, the Holder hereof shall be deemed to have represented and
warranted that it is not a Benefit Plan.
The recitals contained herein shall be taken as the statements of the
Depositor, the General Partner or the Servicer, as the case may be, and the
Owner Trustee assumes no responsibility for the correctness thereof. The Owner
Trustee makes no representations as to the validity or sufficiency of this
Certificate or of any Receivable or related document.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual or facsimile
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or type name and address, including postal zip
code, of assignee)
the within Trust Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
_______________________________________________ Attorney to transfer said Trust
Certificate on the books of the Trust Certificate Registrar, with full power of
substitution in the premises.
Dated:
------------------------*
Signature Guaranteed:
------------------------*
- --------------------------
* NOTICE: The signature to this assignment must correspond
with the name of the registered owner as it appears on the
face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include
membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Certificate Registrar in addition
to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
<PAGE>
EXHIBIT B
[FORM OF]
CERTIFICATE OF TRUST OF
THE MONEY STORE AUTO TRUST 1997-2
THIS Certificate of Trust of The Money Store Auto Trust 1997-2 (the
"Trust"), dated as of __________ __, 199__, is being duly executed and filed by
__________________________, a ________________ and ________________________, an
individual, as trustees, to form a business trust under the Delaware Business
Trust Act (12 DEL. CODE, ss. 3801 ET SEQ.).
1. NAME. The name of the business trust formed hereby is The Money
Store Auto Trust 1997-2.
2. This Certificate of Trust will be effective __, 199 .
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
BANKERS TRUST (DELAWARE), not in its
individual capacity but solely as
owner trustee of the Trust.
By:________________________________
Name:
Title:
NOTE GUARANTY INSURANCE POLICY
OBLIGATIONS: $220,500,000 POLICY NUMBER: 24237
The Money Store Auto Trust 1997-2
Class A-1 and Class A-2
Asset Backed Notes
MBIA Insurance Corporation (the "Insurer"), in consideration of the payment
of the premium and subject to the terms of this Note Guaranty Insurance Policy
(this "Note Policy"), hereby unconditionally and irrevocably guarantees to any
Noteholder that an amount equal to each full and complete Note Insured Payment
will be received from the Insurer by The Chase Manhattan Bank, or its successor,
as Indenture Trustee for the Noteholders (the "Indenture Trustee"), on behalf of
the Noteholders, for distribution by the Indenture Trustee to each Noteholder of
each Noteholder's proportionate share of the Note Insured Payment. The Insurer's
obligations hereunder with respect to a particular Note Insured Payment shall be
discharged to the extent funds equal to the applicable Note Insured Payment are
received by the Indenture Trustee, whether or not such funds are properly
applied by the Indenture Trustee. Note Insured Payments shall be made only at
the time set forth in this Note Policy and no accelerated Note Insured Payments
shall be made regardless of any acceleration of the Obligations, unless such
acceleration is at the sole option of the Insurer.
Notwithstanding the foregoing paragraph, this Note Policy does not cover
shortfalls, if any, attributable to the liability of the Trust or the Indenture
Trustee for withholding taxes, if any (including interest and penalties in
respect of any such liability).
The Insurer will pay any Note Insured Payment that is a Note Preference
Amount on the Business Day following receipt on a Business Day by the Fiscal
Agent (as described below) of (i) a certified copy of the order requiring the
return of preference payment, (ii) an opinion of counsel satisfactory to the
Insurer that such order is final and not subject to appeal, (iii) an assignment
in such form as is reasonably required by the Insurer, irrevocably assigning to
the Insurer all rights and claims of the Noteholder relating to or arising under
the Obligations against the debtor which made such preference payment or
otherwise with respect to such preference payment and (iv) appropriate
instruments to effect the appointment of the Insurer as agent for such
Noteholder in any legal proceeding related to such preference payment, such
instruments being in a form satisfactory to the Insurer, provided that if such
documents are received after 12:00 noon New York City time on such Business Day,
they will be deemed to be received on the following Business Day. Such payments
shall be disbursed to the receiver or trustee in bankruptcy named in the final
order of the court exercising jurisdiction on behalf of the Noteholder and not
to any Noteholder directly unless such Noteholder has returned principal or
interest paid on the Obligations to such receiver or trustee in bankruptcy, in
which case such payment shall be disbursed to such Noteholder.
The Insurer will pay any other amount payable hereunder no later than 12:00
noon New York City time on the later of the Distribution Date on which the
related Note Deficiency Amount is due or the second Business Day following
receipt in New York, New York on a Business Day by State Street Bank and Trust
Company, N.A., as Fiscal Agent for the Insurer or any successor fiscal agent
appointed by the Insurer (the "Fiscal Agent") of a Notice (as described below),
provided that if such Notice is received after 12:00 noon New York City time on
such Business Day, it will be deemed to be received on the following Business
Day. If any such Notice received by the Fiscal Agent is not in proper form or is
otherwise insufficient for the purpose of making claim hereunder it shall be
deemed not to have been received by the Fiscal Agent for purposes of this
paragraph, and the Insurer or the Fiscal Agent, as the case may be, shall
promptly so advise the Indenture Trustee and the Indenture Trustee may submit an
amended Notice.
Note Insured Payments due hereunder unless otherwise stated herein will be
disbursed by the Fiscal Agent to the Indenture Trustee on behalf of the
Noteholders by wire transfer of immediately available funds in the amount of the
Note Insured Payment less, in respect of Note Insured Payments related to Note
Preference Amounts, any amount held by the Indenture Trustee for the payment of
such Note Insured Payment and legally available therefor.
The Fiscal Agent is the agent of the Insurer only and the Fiscal Agent
shall in no event be liable to Noteholders for any acts of the Fiscal Agent or
any failure of the Insurer to deposit or cause to be deposited, sufficient funds
to make payments due under this Note Policy.
Subject to the terms of the Agreement, the Insurer shall be subrogated to
the rights of each Noteholder to receive payments under the Obligations to the
extent of any payment by the Insurer hereunder.
As used herein, the following terms shall have the following meanings:
"Agreement" means the Sale and Servicing Agreement dated as of May 31,
1997 among The Money Store Auto Trust 1997-2, as Issuer, TMS Auto Holdings,
Inc., as Seller, The Money Store Auto Finance Inc., as Servicer and The Money
Store Inc.. as Representative, without regard to any amendment or supplement
thereto.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which the Insurer or banking institutions in New York City or in the city in
which the corporate trust office of the Indenture Trustee is located are
authorized or obligated by law or executive order to close.
"Note Deficiency Amount" means (i) for any Distribution Date, (a) the
excess, if any, of the Noteholders' Interest Distributable Amount over the
Distribution Amount remaining after payment of amounts pursuant to Section
5.6(b)(i) and (ii) of the Agreement and (b) the excess, if any, of the
Noteholders' Principal Distributable Amount over the Distribution Amount
remaining after payment of amounts pursuant to Section 5.6(b)(i)-(iii) of the
Agreement and (ii) for any Distribution Date prior to the Parity Date, the
Accelerated Principal Distributable Amount.
"Noteholder" means each holder of a Note who, on the applicable
Distribution Date, is entitled under the terms of the applicable Obligations to
payment thereunder.
"Note Insured Payment" means (i) as of any Distribution Date any Note
Deficiency Amount and (ii) any Note Preference Amount.
"Note Preference Amount" means any amount previously distributed to a
Noteholder on the Obligations that is recoverable and sought to be recovered as
a voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code (11 U.S.C.), as amended from time to time in accordance with a
final nonappealable order of a court having competent jurisdiction.
"Notice" means the telephonic or telegraphic notice, promptly confirmed in
writing by telecopy substantially in the form of Exhibit A attached hereto, the
original of which is subsequently delivered by registered or certified mail,
from the Indenture Trustee specifying the Note Insured Payment which shall be
due and owing on the applicable Distribution Date.
Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Agreement as of the date of execution
of this Note Policy, without giving effect to any subsequent amendment to or
modification of the Agreement unless such amendment or modification has been
approved in writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent may be made
at the address listed below for the Fiscal Agent or such other address as the
Insurer shall specify in writing to the Indenture Trustee.
The notice address of the Fiscal Agent is 15th Floor, 61 Broadway, New
York, New York 10006 Attention: Municipal Registrar and Paying Agency, or such
other address as the Fiscal Agent shall specify to the Indenture Trustee in
writing.
This Note Policy is being issued under and pursuant to, and shall be
construed under, the laws of the State of New York, without giving effect to the
conflict of laws principles thereof.
The insurance provided by this Note Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Note Policy is not cancelable for any reason. The premium on this Note
Policy is not refundable for any reason including payment, or provision being
made for payment, prior to maturity of the Obligations.
IN WITNESS WHEREOF, the Insurer has caused this Note Policy to be executed
and attested this 26th day of June, 1997.
MBIA INSURANCE CORPORATION
By_________________________
President
Attest:
By_________________________
Assistant Secretary
<PAGE>
EXHIBIT A
TO NOTE GUARANTY INSURANCE
POLICY NUMBER: 24237
NOTICE UNDER NOTE GUARANTY
INSURANCE POLICY NUMBER: 24237
State Street Bank and Trust Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
15th Floor
61 Broadway New York, NY 10006
Attention: Municipal Registrar and
Paying Agency
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
The undersigned, a duly authorized officer of The Chase Manhattan Bank, as
indenture trustee (the "Indenture Trustee"), hereby certifies to State Street
Bank and Trust Company, N.A. (the "Fiscal Agent") and MBIA Insurance Corporation
(the "Insurer"), with reference to Note Guaranty Insurance Policy Number: 24237
(the "Note Policy") issued by the Insurer in respect of the $220,500,000 The
Money Store Auto Trust 1997-2, Class A-1 and Class A-2 Asset Backed Notes (the
"Obligations"), that:
(i) the Indenture Trustee is the indenture trustee under the
Indenture dated as of May 31, 1997 among the Trust and the
Indenture Trustee, without regard to any amendment or supplement
thereto;
(ii) the amount due under clause (a) of the definition of
Note Deficiency Amount for the Distribution Date occurring on [ ] (the
"Applicable Distribution Date") is $[ ];
(iii) the amount due under clause (b) of the definition of
Note Deficiency Amount for the Applicable Distribution Date is $[ ];
(iv) the sum of the amounts listed in paragraphs (ii) and
(iii) above is $[ ] (the "Note Deficiency Amount");
(v) the amount of previously distributed payments on the
Obligations that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the
Bankruptcy Code in accordance with a final nonappealable order of a
court having competent jurisdiction is $[ ] (the "Note Preference
Amount");
(vi) the total Note Insured Payment due is $[ ], which
amount equals the sum of the Note Deficiency Amount and the Note
Preference Amount;
(vii) the Indenture Trustee is making a claim under and
pursuant to the terms of the Note Policy for the dollar amount of the
Note Insured Payment set forth in (iv) above to be applied to the
payment of the Note Deficiency Amount for the Applicable Distribution
Date in accordance with the Agreement and for the dollar amount of the
Note Insured Payment set forth in (v) above to be applied to the
payment of any Note Preference Amount; and
(viii) the Indenture Trustee directs that payment of the
Note Insured Payment be made to the following account by bank wire
transfer of federal or other immediately available funds in accordance
with the terms of the Note Policy: [TRUSTEE'S ACCOUNT NUMBER].
Any capitalized term used in this Notice and not otherwise defined herein
shall have the meaning assigned thereto in the Note Policy.
Any Person Who Knowingly And With Intent To Defraud Any Insurance Company
or Other Person Files An Application For Insurance or Statement of Claim
Containing Any Materially False Information, or Conceals For The Purpose of
Misleading, Information Concerning Any Fact Material Thereto, Commits A
Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A Civil
Penalty Not To Exceed Five Thousand Dollars And The Stated Value of The Claim
For Each Such Violation.
IN WITNESS WHEREOF, the Indenture Trustee has executed and delivered this
Notice under the Note Policy as of the [ ] day of [ ].
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By_________________________
Title______________________
CERTIFICATE GUARANTY INSURANCE POLICY
OBLIGATIONS: $4,455,000 POLICY NUMBER: 24238
The Money Store Auto Trust 1997-2
Asset Backed Certificates
MBIA Insurance Corporation (the "Insurer"), in consideration of the payment
of the premium and subject to the terms of this Certificate Guaranty Insurance
Policy (this "Certificate Policy"), hereby unconditionally and irrevocably
guarantees to any Certificateholder that an amount equal to each full and
complete Certificate Insured Payment will be received from the Insurer by
Bankers Trust (Delaware) or its successors, as Owner Trustee for the
Certificateholders (the "Owner Trustee"), on behalf of the Certificateholders
from the Insurer for distribution by the Owner Trustee to each Certificateholder
of each Certificateholder's proportionate share of the Certificate Insured
Payment. The Insurer's obligations hereunder with respect to a particular
Certificate Insured Payment shall be discharged to the extent funds equal to the
applicable Certificate Insured Payment are received by the Owner Trustee,
whether or not such funds are properly applied by the Owner Trustee. Certificate
Insured Payments shall be made only at the time set forth in this Note Policy
and no accelerated Certificate Insured Payments shall be made regardless of any
acceleration of the Obligations, unless such acceleration is at the sole option
of the Insurer.
Notwithstanding the foregoing paragraph, this Certificate Policy does not
cover shortfalls, if any, attributable to the liability of the Trust or the
Owner Trustee for withholding taxes, if any (including interest and penalties in
respect of any such liability).
The Insurer will pay any Certificate Insured Payment that is a Certificate
Preference Amount on the Business Day following receipt on a Business Day by the
Fiscal Agent (as described below) of (i) a certified copy of the order requiring
the return of a preference payment, (ii) an opinion of counsel satisfactory to
the Insurer that such order is final and not subject to appeal (iii) an
assignment in such form as is reasonably required by the Insurer, irrevocably
assigning to the Insurer all rights and claims of the Certificateholder relating
to or arising under the Obligations against the debtor which made such
preference payment or otherwise with respect to such preference payment and (iv)
appropriate instruments to effect the appointment of the Insurer as agent for
such Certificateholder in any legal proceeding related to such preference
payment, such instruments being in a form satisfactory to the Insurer. provided
that if such documents are received after 12:00 noon New York City time on such
Business Day, they will be deemed to be received on the following Business Day.
Such payments shall be disbursed to the receiver or trustee in bankruptcy named
in the final order of the court exercising jurisdiction on behalf of the
Certificateholder and not to any Certificateholder directly unless such
Certificateholder has returned principal or interest paid on the Obligations to
such receiver or trustee in bankruptcy, in which case such payment shall be
disbursed to such Certificateholder.
The Insurer will pay any other amount payable hereunder no later than 12:00
noon New York City time on the later of the Distribution Date on which the
related Certificate Deficiency Amount is due or the second Business Day
following receipt in New York, New York on a Business Day by State Street Bank
and Trust Company, N.A., as Fiscal Agent for the Insurer or any successor fiscal
agent appointed by the Insurer (the "Fiscal Agent") of a Notice (as described
below); provided that if such Notice is received after 12:00 noon New York City
time on such Business Day, it will be deemed to be received on the following
Business Day. If any such Notice received by the Fiscal Agent is not in proper
form or is otherwise insufficient for the purpose of making claim hereunder it
shall be deemed not to have been received by the Fiscal Agent for purposes of
this paragraph, and the Insurer or the Fiscal Agent. as the case may be, shall
promptly so advise the Owner Trustee and the Owner Trustee may submit an amended
Notice.
Certificate Insured Payments due hereunder unless otherwise stated herein
will be disbursed by the Fiscal Agent to the Owner Trustee on behalf of the
Certificateholders by wire transfer of immediately available funds in the amount
of the Certificate Insured Payment less, in respect of Certificate Insured
Payments related to Certificate Preference Amounts, any amount held by the Owner
Trustee for the payment of such Certificate Insured Payment and legally
available therefor.
The Fiscal Agent is the agent of the Insurer only and the Fiscal Agent
shall in no event be liable to Certificateholders for any acts of the Fiscal
Agent or any failure of the Insurer to deposit or cause to be deposited,
sufficient funds to make payments due under this Certificate Policy.
Subject to the terms of the Agreement, the Insurer shall be subrogated to
the rights of each Certificateholder to receive payments under the Obligations
to the extent of any payment by the Insurer under the Certificate Policy.
As used herein, the following terms shall have the following meanings:
"Agreement" means the Sale and Servicing Agreement dated as of May 31,
1997, among The Money Store Auto Trust 1997-2, as Issuer, TMS Auto Holdings,
Inc., as Seller, The Money Store Auto Finance Inc., as Servicer and The Money
Store Inc., as Representative, without regard to any amendment or supplement
thereto.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which the Insurer or banking institutions in New York City or in the city in
which the corporate trust office of the Owner Trustee under the Agreement is
located are authorized or obligated by law or executive order to close.
"Certificate Deficiency Amount" means for any Distribution Date, (a) the
excess, if any, of Certificateholders Interest Distributable Amount over the
Distribution Amount remaining after payment of amounts pursuant to Section
5.6(b)(i) - (iv) of the Agreement and (b) the excess, if any, of the
Certificateholders Principal Distributable Amount over the Distribution Amount
remaining after payment of amounts pursuant to Section 5.6(b)(i) - (v) of the
Agreement.
"Certificateholder" means each holder of a Certificate (other than the
General Partner, the Seller, the Servicer or any subservicer) who, on the
applicable Distribution Date, is entitled under the terms of the applicable
Obligations to payment thereunder.
"Certificate Insured Payment" means (i) as of any Distribution Date any
Certificate Deficiency Amount and (ii) any Certificate Preference Amount.
"Certificate Preference Amount" means any amount previously distributed to
a Certificateholder on the Obligations that is recoverable and sought to be
recovered as a voidable preference by a trustee in bankruptcy pursuant to the
United States Bankruptcy Code (11 U.S.C.), as amended from time to time, in
accordance with a final nonappealable order of a court having competent
jurisdiction.
"Notice" means the telephonic or telegraphic notice, promptly confirmed in
writing by fax substantially in the form of Exhibit A attached hereto, the
original of which is subsequently delivered by registered or certified mail,
from the Owner Trustee specifying the Certificate Insured Payment which shall be
due and owing on the applicable Distribution Date.
Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Agreement as of the date of execution
of this Certificate Policy, without giving effect to any subsequent amendment to
or modification of the Agreement unless such amendment or modification has been
approved in writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent may be made
at the address listed below for the Fiscal Agent or such other address as the
Insurer shall specify in writing to the Owner Trustee.
The notice address of the Fiscal Agent is 61 Broadway, 15th Floor, New
York, New York 10006 Attention: Municipal Registrar and Paying Agency, or such
other address as the Fiscal Agent shall specify to the Owner Trustee in writing.
This Certificate Policy is being issued under and pursuant to, and shall be
construed under, the laws of the State of New York, without giving effect to the
conflict of laws principles thereof.
The insurance provided by this Certificate Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Certificate Policy is not cancelable for any reason. The premium on
this Certificate Policy is not refundable for any reason including payment, or
provision being made for payment, prior to maturity of the Obligations.
IN WITNESS WHEREOF, the Insurer has caused this Certificate Policy to be
executed and attested this 26th day of June, 1997.
MBIA INSURANCE CORPORATION
By ______________________________
President
Attest:
By ______________________________
Assistant Secretary
<PAGE>
MBIA
EXHIBIT A
TO CERTIFICATE GUARANTY INSURANCE POLICY
NUMBER: 24238
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER: 24238
State Street Bank and Trust Company, N.A., as Fiscal Agent
for MBIA Insurance Corporation
61 Broadway, 15th Floor
New York, NY 10006
Attention: Municipal Registrar and Paying Agency
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
The undersigned, a duly authorized officer of Bankers Trust (Delaware), as
owner trustee (the "Owner Trustee"), hereby certifies to State Street Bank and
Trust Company, N.A. (the "Fiscal Agent") and MBIA Insurance Corporation (the
"Insurer"), with reference to Certificate Guaranty Insurance Policy Number:
24238 (the "Certificate Policy") issued by the Insurer in respect of the
$4,455,000 The Money Store Auto Trust 1997-2, Asset Backed Certificates (the
"Obligations"), that:
(i) the Owner Trustee is the owner trustee under the Trust
Agreement dated as of May 31, 1997, between the Trust and the
Owner Trustee without regard to any amendment or supplement thereto.
(ii) the amount due under clause (a) of the definition of
Certificate Deficiency Amount for the Distribution Date occurring on
____________ (the "Applicable Distribution Date") is $ ;
(iii) the amount due under clause (b) of the definition of
Certificate Deficiency Amount for the Applicable Distribution Date is
$ ;
(iv) the sum of the amounts listed in paragraphs (ii) and
(iii) above is $ (the "Certificate Deficiency Amount");
(v) the amount of previously distributed payments on the
Obligations that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the
Bankruptcy Code in accordance with a final nonappealable order of a
court having competent jurisdiction is $ (the "Certificate Preference
Amount");
(vi) the total Certificate Insured Payment due is
$_____________, which amount equals the sum of the Certificate
Deficiency Amount and the Certificate Preference Amount;
(vii) the Trustee is making a claim under and pursuant to the
terms of the Certificate Policy for the dollar amount of the
Certificate Insured Payment set forth in (iv) above to be applied to
the payment of the Certificate Deficiency Amount for the Applicable
Distribution Date in accordance with the Agreement and for the dollar
amount of the Certificate Insured Payment set forth in (v) above to be
applied to the payment of any Certificate Preference Amount; and
(viii) the Trustee directs that payment of the Certificate
Insured Payment be made to the following account by bank wire transfer
of federal or other immediately available funds in accordance with the
terms of the Certificate Policy: [TRUSTEE'S ACCOUNT NUMBER].
Any capitalized term used in this Notice and not otherwise defined herein
shall have the meaning assigned thereto in the Certificate Policy.
Any Person Who Knowingly And With Intent To Defraud Any Insurance Company
or Other Person Files An Application For Insurance or Statement of Claim
Containing Any Materially False Information, or Conceals For The Purpose of
misleading, Information Concerning Any Fact Material Thereto, Commits A
Fraudulent Insurance Act, Which Is A Crime. And Shall Also Be Subject To A
Civil Penalty Not To Exceed Five Thousand Dollars And The Stated Value of The
Claim For Each Such Violation.
IN WITNESS WHEREOF, the Owner Trustee has executed and delivered this
Notice under the Certificate Policy as of the day of
BANKERS TRUST (Delaware), not in its individual
capacity but solely as Owner Trustee
By______________________________________
Title
